A new study from Bitwise claims that as much as 95 percent of all Bitcoin trading volume on unregulated cryptocurrency exchanges is fake, CNBC reports. Researchers concluded that nearly all of the volume reported on 71 of the top 81 crypto exchanges involved wash trading designed to create a false impression of market activity.
Bitwise analysis estimate that only about $273 million of the roughly $6 billion in average daily trading at those exchanges is real. The company’s global head of research, Matthew Hougan, suggested that the analysis showed evidence of market manipulation:
“People looked at cryptocurrency and said this market is a mess; that’s because they were looking at data that was manipulated. When you cut away the echo chamber of these nonsense numbers, it should be an efficient, well-arbitraged market.”
In remarks to CNBC, Hougan said, “The idea that there’s fake volume has been rumored for a long time; we were just the first people to systematically look at which exchanges were delivering real volume.”
The analysis comes as Bitwise is working to obtain approval for its proposed Bitcoin exchange-traded fund, or ETF. Company representatives have confirmed a meeting with SEC officials earlier this week, where they discussed their ETF application. The company submitted its conclusions to the SEC at that meeting, to “help regulators cut through the noise.”