Most Bitcoin Trading Faked by Unregulated Exchanges, Study Finds
Fraudulent trading volume has dogged cryptocurrency trading for years, but the extent of the market manipulation has been difficult to determine. Bitwise Asset Management said its analysis of trading activity at 81 exchanges over four days in March indicates that the actual market for bitcoin is far smaller than previously thought. The San Francisco-based company submitted its research to the U.S. Securities and Exchange Commission with an application to launch a bitcoin-based exchange-traded fund.
The study, made public Thursday, is an attempt to alleviate the agency's longstanding concerns that a bitcoin ETF would leave investors exposed to fraud and market manipulation. Bitwise's fund, if approved, would be based upon the 5% of trading it considers legitimate, said Matthew Hougan, Bitwise's head of global research. That volume comes from 10 regulated exchanges that can verify that their trading data and customers are real. This slice of the market, he said, is well regulated, transparent and efficient. "I hope everyone sees there is a real market for bitcoin," he said.
Fraudulent trading volume has dogged cryptocurrency trading for years, but the extent of the market manipulation has been difficult to determine. Bitwise Asset Management said its analysis of trading activity at 81 exchanges over four days in March indicates that the actual market for bitcoin is far smaller than previously thought. The San Francisco-based company submitted its research to the U.S. Securities and Exchange Commission with an application to launch a bitcoin-based exchange-traded fund.
The study, made public Thursday, is an attempt to alleviate the agency's longstanding concerns that a bitcoin ETF would leave investors exposed to fraud and market manipulation. Bitwise's fund, if approved, would be based upon the 5% of trading it considers legitimate, said Matthew Hougan, Bitwise's head of global research. That volume comes from 10 regulated exchanges that can verify that their trading data and customers are real. This slice of the market, he said, is well regulated, transparent and efficient. "I hope everyone sees there is a real market for bitcoin," he said.
