Exchanges

Up to 86% of total reported cryptocurrency trading volume is likely fake, according to analysis of exchange website visits

Quick Take

  • The Block analyzed 48 cryptocurrency exchanges, focusing on monthly traffic over the past six months (ranging from November 2018 to April 2019)
  • There were nearly 800 million cryptocurrency exchange website visits in that time period
  • The Block compared the number of website visits to trading volume across exchanges to identify suspects that participate in faking trading volume, as indicated by disproportionately high volume relative to website visits
  • The exchanges that have by far the highest volume per website visit, and which are likely engaging in significant volume faking are Coineal, Fatbtc, BW, BitMax, LBank, DOBI Exchange, Bit-Z, DigiFinex, Idcm, DragonEX, ZB, CoinTiger, IDAX, Bibox, CoinBene, BitForex, Bithumb, Negocie Coins, Liquid and OKEx
  • On the other hand, Indodax, BX Thailand, Luno, CEX.IO, Zaif, and KuCoin do not appear to be faking any volume unless they are also engaging in faking traffic
  • Over the past six months, the total reported trading volume was $1.96 trillion, of which only $272.5 billion appears to be real trading volume on non-volume faking exchanges
  • About 86% of the trading volume looks to be fake with 65% of that total real volume originating on Binance and Bitfinex, both of which have virtually no regulatory oversight

Bitwise released a 104-page white paper on Friday, which examined exchanges for fake volume, and found that roughly 95% of reported trading volume in bitcoin is fake or non-economic in nature. Bitwise used screen scrapers to collect live trading data from over 80 exchanges for a period of several months. The only 10 exchanges that passed Bitwise’s tests are Binance, Bitfinex, Coinbase, Kraken, Bitstamp, bitFlyer, Gemini, itBit, Bittrex, and Poloniex.