TheTie Report Pegs 3 of 4 Cryptocurrency Exchanges Show Suspect Trading Volumes

TheTie has recently released a report in which they show that more than 86% of the reported Bitcoin exchange volume is currently suspicious. Additionally, 75% of the exchanges report extremely dubious volumes. This is very negative for space. In 2018, trading volumes fell as well as the interest from users in digital assets. Since November 2018, it seems that trading volumes have been recovering, but it is possible to associate this recovery with wash trading and other manipulative technics.

Fake Crypto Trading Volumes Affect The Industry

Bithumb, one of the most popular exchanges in the crypto market, has been investigated on several occasions due to the fact that its volumes were extremely high. According to CCN, the exchange was expected to have a monthly volume of $1.2 billion. However, it reported over $28 billion, almost 2,000 percent higher than what it was expected.

TheTie explains about this situation:

“The weighted average trading volume per web visit for Binance, Coinbase Pro, Gemini, Poloniex and Kraken was selected as a baseline volume per user to calculate expected volume. This amounted to $591 per web visit.”

Bittrex is one of the most popular and oldest exchanges in the space. It has registered one of the best ratings based on these metrics. Bittrex has an expected user value close to $138 per visit. The report suggests that it is less likely for Bittrext to be faking their trading volume.

According to Mati Greenspan, a senior analyst at eToro, demand may not be the same as during the bull market in 2017. However, traders are still finding profitable trades in the volatile cryptocurrency market. And indeed, he said that we are in an “alt season” in which altcoins perform better than Bitcoin.

Fake volumes are a very important concern for users because if there is an exchange with large trading volume, there are more possibilities for users to find a trade they are searching for. Meanwhile, smaller markets might not have enough trading activity, thus traders could find some issues with these exchanges and find fewer trades than previously expected.

The report has also gathered data from another site in order to rank exchanges by their volume per visitor.

The U.S. Securities and Exchange Commission (SEC) is currently concerned about how different parties in the crypto space manipulate the market in their favor to improve their positions. It will be very positive for space if the exchange starts reporting real trading volumes rather than fake estimations.

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