Tanya Abrosimova
Independent Analyst
- The problem of fake trading volumes remains acute.
- The exchanges inflate their volumes in marketing purposes.
Cryptocurrency exchanges continue to artificially inflate their trading volumes in marketing purposes, according to the results of the recent research performed to Alameda Research and derivatives exchange FTX Global.
The experts found out that nearly 70% of trading volumes reflected on the popular cryptocurrency portal CoinMarketCap are fake. The figure is significantly lower from the one reported by Bitwise Asset Management in March, though the overestimation is still huge.
The authors of the report say that the results may differ due to the different methodology used to calculate the volumes. They believe that Bitwise applied an unjustifiably critical approach to data analyzing. As a result, lots of real volumes were categorized as fake.
Namely, Alameda and FTX Global believe that large exchanges like OKEx and Huobi report real figures as about 70% of their transactions are authentic. Meanwhile, Bitwise estimated that more than 60% of Huobi's volume and more than 90% of OKEx's volume were fake.
Both Huobi and OKEx representatives denied their engagement in so-called wash trading.
"Recently we have joined the Data Accountability & Transparency Alliance (DATA) led by CoinMarketCap, as a commitment to revealing as much data as possible," an OKEx spokesperson added.
Alameda analyses the data based on various parameters, including manual data verification and reconciliation of order books.
The experts found out that some trading platforms report data from other exchanges as their own with a delay. The key reasoning behind these tactics is to raise its position on CoinMarketCap's rating by creating false liquidity.
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