More than half of Bitcoin’s (CRYPTO: BTC) trading volume is fake, according to data analyzed by Forbes.
What Happened: Data from leading global cryptocurrency exchanges recorded $262 billion worth of trading volume for Bitcoin on June 14. According to Forbes, the true figure was closer to $128 billion.
The report analyzed trading data from major exchanges like U.S.-based Coinbase (NASDAQ:COIN) Global Inc (NASDAQ: COIN), CME Group Inc(NASDAQ: NASDAQ:CME) and Binance, as well as less popular unregulated exchanges across the globe, grouping them into Group 1, Group 2 and Group 3 exchanges.
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The authenticity of trading volume from Group 2 and Group 3 exchanges was found to be far lower than Group 1 exchanges, suggesting a significant amount of trades reported were likely to be fake or non-economic.
“Group 3 consists of 36 crypto exchanges which, with few exceptions, are unregulated and small. Their huge self-reported volume and tiny visitor number cast doubt on the possibility that a limited audience could indeed generate that much trading activity,” stated the report.
It drew attention to Hong Kong-based cryptocurrency exchange BitCoke which reports $14 billion in daily trading volume as an example. Data from SimilarWeb shows that the exchange receives less than 10,000 monthly visitors, with 53% coming from Argentina alone, implying a significant discrepancy in reported volume and organic traffic.
The report acknowledged Binance’s dominance in cryptocurrency markets.
“Binance remains the 800-lb elephant in the room. Even after a 45% discount on its volume, Binance still generates the equivalent of 27.3% of all 'real' trading volume,” the report said.
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Price Action: Bitcoin (CRYPTO: BTC) was trading at $19,660, down 1.9% over 24 hours at press time, according to data from Benzinga Pro.
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