51% of reported Bitcoin trading volume is fake, says new report

According to the latest Forbes study of 157 exchanges, Bitcoin trading volume is significantly lower than reported.

According to the report, Bitcoin trading volume as of June 14, 2022 was $128 billion, well below the $262 billion total reported by all crypto exchanges.

This reveals that around 51% of all Bitcoin trading activity turned out to be fake or uneconomical.

The Role of Tether in Bitcoin Trading

According to Forbes, Tether plays an important role in Bitcoin spot trading, as the majority of trrading activity comes from stablecoins. However, fiat currencies like the US dollar, Japanese yen, and South Korean won also participate in a high percentage of transactions.

Overall, over 90% of BTC liquidity is in exchange for the USDT stablecoin or the US dollar itself. Moreover, there is also a strong demand for currencies other than the dollar from Europe, Japan, South Korea and Turkey.

The report also revealed that most Bitcoin transactions originate from BTC perpetual transactions, followed by spot trading and futures trading.

Binance, FTX and OKX: the leading exchanges for Bitcoin trading

The report grouped crypto exchanges into three categories, based on the differences between their reported volume and their actual volume.

According to the report, the top three exchanges by trading volume are Binance, FTX, and OKX. There are also Bybit, Bitget, MEXC Global, KuCoin, BingX, Crypto.com and Huobi Global.

Interestingly, only FTX, OKX, and Crypto.com are in Group 1, which are crypto exchanges with 0-25% differences between their actual trading volume and their reported Bitcoin trading activity.

The other platforms are part of group 2, which is made up of exchanges with a volume gap of 26 to 79%.

Group 3 consists mainly of small, unregulated crypto exchanges, some of which have reported clearly false Bitcoin trading volume. For example, BitCoke reported a volume of $14 billion even though the platform has less than 10,000 monthly visitors, and more than half of those are Argentinian.

Questionable data from exchanges with minimal regulatory oversight

The report states that one of the main problems with false trading volume or non-economic data comes from exchanges that operate under minimal regulatory oversight, which affects the credibility of their figures.

These platforms, which include Binance, Bybit and MEXC Global, among others, reported a trading volume of $217 billion, while their actual volume would be $89 billion.

Why do crypto exchanges report false trading volumes?

According to the Forbes report, some traders engage in wash trading in an attempt to paint a false picture of the demand and growing popularity of their tokens.

The report states that platforms benefit from these uneconomic exchanges because “it allows them to appear to have more volume than they really do, potentially encouraging more genuine exchanges.”

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