Fake Trading Is Still the Mainstream in Most Bitcoin Transactions

Last Modified:12 May 2020 16:09:09

According to the recent reports published, Wash Trading includes more than 80% of the highest 25 Bitcoin transactions in Coinmarketcap. The real price of the transactions by these cryptocurrencies is just 1% of the reported total price, and only two Bitcoin pairs, i.e., Binance and Bitfinex are exceptions.

What is wash trading?

“Wash trading” is a kind of manipulating the market in which the investor simultaneously measures selling and buying similar financial instruments; consequently, it creates a type of corruption and unreal activity in the transactions market. According to the report by Blockchain Transparency Institute, a data Blockchain research group claimed that the biggest transgressors of transactions is OKex. These researchers found out that all the highest 30 tokens transacted in the OKex market have engaged in wash trading and it is discovered when their exchanges were analyzed through specific algorithms. Although even the main price of these interactions still cause them to be in the highest tenth rank of transaction tables. Other transaction markets include Huobi, HitBTC, and Bithumb. Bithumb, among them, is monthly doing wash trade via currencies such as Monero, Dash, Bitcoin Gold and ZCash.

Which markets have allocated the highest exchanges to themselves in Coinmarketcap?

The coinbene market is at the highest level in this report. The statistics show that the number of trades in this market is totally different from that of real ones in 24 hours and real trades are just 1% of the whole trades. Meanwhile, Binance and Bitfinex are at the third and fourth rank, and the price of their real exchanges equals what the numbers show.

This kind of manipulation in the market can be very dangerous for Token-based projects since it causes them to pay high prices to be placed in the lists owning greater transactions because they think they have high liquidity. According to this report, on the average, each project has spent $50000 for listing fees this year in order to add more tokens in wash trades. Totally, up to $100 million has been specified to it in 2018. They add now that, 50 exchanges are wash trading, and acquired more than 95% of their transactions in this way; $500000 is entered the exchange cycle annually through it, and some exchanges have earned more than $1 million from collecting these costs.

Don’t be surprised if some new cryptocurrencies appear in the best list of Coinmarketcap market that you have not heard about yet. Wash trading issue is one of serious cryptocurrency trade market risks, and many of these companies address these trades for tax evasion and somehow laundering. “How do cryptocurrencies and related markets sufficiently supervise these trades?” is a question the solution whereof needs time. Currently, these cryptocurrency markets have not had any definite reaction against accusations about them and are attempting to terminate such trades soon.