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Is 87 percent of crypto trading volume fake?

chepicap.com 19 March 2019 04:40, UTC

A recent analysis carried out by crypto trading data platform The TIE has cast serious doubt on reported volumes on exchanges. As much as 87 percent of total volume may be faked, amounting to over $13 billion.

The report took figures from the top 100 online crypto exchanges by trading volumes. It compared the number of visits to a particular site in a month with the amount of crypto usually traded, finding some major differences between the leading trading platforms and some of the smaller ones further down the list.

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The chart below shows reported trading volumes per exchange vs. monthly web visitors. While exchanges like #Kraken, #Binance, and #Coinbase show similarities between viewership and trading volume, others like Coinbene and ZBG have suspiciously high reported volume vs. views. pic.twitter.com/7Q0jBRNj9Y
— The TIE (@TheTIEIO) March 18, 2019

Read more: Bitcoin volume is getting close to levels not seen since April of 2018

Taking the numbers of monthly visitors and trading volume averages allowed the team to work out roughly what exchanges' trading volumes would be expected to be, and this was plotted on a chart with the reported figures. There were some major outliers, and around 59 percent of volumes were over 10 times what they were expected to be.

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Next, we multiplied each exchanges' web views by this $591 to calculate what we would expect their volumes to look like.

In the chart below the further to the left and top an exchange is, the higher that exchanges reported vs expected trading volumes. pic.twitter.com/uvACvsIllz
— The TIE (@TheTIEIO) March 18, 2019

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If each exchange averaged the volume per visit of CoinbasePro, Gemini, Poloniex, Binance, and Kraken, we would expect the real trading volume among the largest 100 exchanges to equal $2.1B per day. Currently that number is being reported as $15.9B. pic.twitter.com/jZzezJMmKk
— The TIE (@TheTIEIO) March 18, 2019

75 percent of the exchanges analyzed had some suspicious trading volume, and a total of 87 percent of the overall trading volume seemed potentially fake. The difference between the trading volume that the analysis predicted and what was actually reported was around $13.8 billion.

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