Bitwise informed the SEC that 95% of trading volumes are fake

Bitwise Asset Management has prepared a presentation for the US Securities and Exchange Commission (SEC) that states that 95% of trading volumes on unregulated stock exchanges are fake and devoid of any economic sense.

The presentation from the crypto index provider is an addition to the application to the SEC for the launch of a Bitcoin-based exchange fund ( ETF ), which is currently under review .

The analytical material begins with the thesis that approximately $ 6 billion of the daily trading volume of cryptocurrencies on the spot market are fake:

“The lion’s share of the volume of trading announced by the exchanges is devoid of economic sense and represents fictitious transactions [ wash trades ]”

According to representatives of the company, the popular analytical service CoinMarketCap transmits dubious data, "thereby creating a fundamentally false impression" of the true scale of the market.

In Bitwise, it is noted that the Bitcoin market is, in fact, “much smaller, more streamlined and regulated,” contrary to popular belief.
Its real volume is $ 273 million.

Real and declared by the exchanges trading volumes according to Bitwise

As an example of a stock exchange with more or less reliable volumes, Bitwise leads Coinbase Pro. According to analysts, the real daily turnover of this trading platform is $ 27 million. At the same time, the company is confident that the Coinbene stock exchange volumes are extremely exaggerated. The daily turnover declared by this platform is $ 480 million.

The researchers concluded that the average daily turnover on the CME and Cboe regulated futures exchanges are not that small – $ 85 million at both sites. For comparison, the calculated Bitwise real trading volume of the largest cryptocurrency exchange Binance is $ 110 million.

"In 2018, the Bitcoin market became much more efficient thanks to the launch of futures, the development of lending and the emergence of large market makers," analysts emphasize.

According to the head of Bitwise’s research department, Matt Hogan, the SEC has repeatedly stressed that the application for launching an ETF must have convincing arguments that the market underlying new financial instruments must be “exceptionally resistant to manipulation.” At the same time, the regulated segment of this market should be significant in scale. Hogan added that his company’s report aims to demonstrate both.

Given that the application was submitted in mid-February, and within 45 days the regulator will have to approve, reject it or request additional time for consideration, information about the SEC decision should appear within the next week.

Earlier, BlockchainJournal published material on how Bitcoin exchanges manipulate trading volumes .

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