Bitwise Asset Management presented a report to the US Securities and Exchange Commission (SEC), which reviewed 83 cryptocurrency exchanges for fake trading volumes, analyzed the relationship between futures on the CME and the spot market, as well as the volume of arbitrage operations on the platforms.
New research from @BitwiseInvest submitted to the SEC today.
Read it here: https://t.co/8rNxypwPSj
It's a 104-page white paper expanding on our March 2019 presentation. It examines 83 exchanges for fake volume, the tight relationship of CME futures & spot, and rapid arbitrage. pic.twitter.com/bS0nBKClpc
– Bitwise (@BitwiseInvest) May 24, 2019
The document, in particular, states that in reality the bitcoin spot market is much smaller, more regulated and more efficient than is commonly believed. Thus, according to the study, the state of the spot market has improved significantly since the beginning of 2018.
Earlier in Bitwise, it was argued that 95% of trading volumes on unregulated exchanges are fake and devoid of any economic sense.
Only 10 of the 83 cryptocurrency exchanges analyzed, passed the original Bitwise test, the purpose of which was to determine whether the sites overstated their trading volumes systematically. These include Binance, Bitfinex, Coinbase, Kraken, Bitstamp, bitFlyer, Gemini, itBit, Bittrex and Poloniex.
It is worth noting that the South Korean cryptocurrency exchanges were not included in the study. In Bitwise, this was explained by the fact that the trading volumes of these sites stand out too much from the rest of the cryptocurrency market.
At the same time, analysts stressed that over time, the average deviation of prices on exchanges with “real” data on trading volumes decreases.
“This happens despite the high volatility and sometimes falling trading volumes and is due to a number of factors that reflect the emergence and strengthening of the market,” say Bitwise.
The researchers also said that the cryptocurrency market was “extremely efficient” and noted the growth in bitcoin-futures trading on the CME exchange.
“After you remove the fake volumes and fake data from the" equation ", you will have an extremely efficient and orderly market that is supported by a significant regulated derivatives market."
In conclusion, Bitwise analysts concluded that, in general, the cryptocurrency market can be considered quite “healthy”, and the prospects for its development are quite promising:
“In times of change, people’s perception of something new is often based on the past. People who read about cryptocurrencies today still think of Mt. Gox, when they have to think about Fidelity; they think about Silk Road when they need to think about Whole Foods. This outdated perception is compounded by poor data quality that permeates a large part of the Bitcoin ecosystem, which may create the impression that the market remains inefficient, chaotic, and subject to problems. ”
Recall the topic of fake trading volumes on exchanges in recent years, more and more concerned with the community. On BlockchainJournal there is a detailed material on why the majority of trading platforms still report on inflated trading volumes, as well as which services help to see real numbers.
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