Research: “51 percent of Bitcoin trading volume is fake”

Last week it was revealed that the Bitcoin blockchain has processed more than 100 trillion dollars in transactions throughout its history. However, a large proportion of those transactions do not appear to be economic transactions. It now appears that a large part of the trading volume on the stock exchanges is not what it seems.

No consensus on trading volume

A new research of Forbes comes back to conclude that more than half of Bitcoin’s trading volume, spread across 157 exchanges, is fake. These exchanges report the daily trading volume in Bitcoin on their platforms based on internal processes, which are slightly different for each party.

In the study, Forbes takes the figures from CoinMarketCap and CoinGecko as an example. While CoinMarketCap reports a daily trading volume of $32 billion, CoinGecko is posting $27 billion. That’s a big difference, especially considering it only takes one day here.

Nomics reported trading volume of $57 billion for the same day, while Messari only recognized a trading volume of $5 billion. Which numbers should we believe? That’s hard to say. The figures from Glassnode and IntoTheBlock also deviate extremely from the average with $7.8 billion and $6.71 billion.

What is the real number?

Forbes has dug deeper into the numbers, writing in the survey that 51 percent of reported trading volume is fake. “We estimate that the global daily trading volume in Bitcoin for the industry was $128 billion on June 14. That’s 51 percent less than the $262 billion you would write based on stock market numbers,” the Forbes researchers said.

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Ultimately, according to Forbes, it is not possible to determine the exact trading volume of Bitcoin and thus the liquidity of the market. The so-called “washtrading”, whereby exchanges fake trading volume is a practice that unfortunately still occurs a lot. That’s because most exchanges are afraid of losing users if they published the actual volumes.

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