FAKE TRADING VOLUMES

Some people believe that crypto is a lie but everybody is entitled to their opinions. If someone asks you how big the crypto market is, what are you likely to do to pull up Coinmarketcap to check? Even though the valuation of Coinmarketcap is good, it is just not perfect because it only reflects the last prices coins were purchased. If Bitcoin is at 20,000 that does not mean everybody sells their coin and gets that 20,000 dollar price. The recent crypto crash smashed the crypto market down from 3 trillion dollars to 1 trillion dollars. People started asking questions and start looking closely at trading volume but they discovered that most trades were fake.

The big question is, how is the possibility? The blockchain is transparent, everyone could look up any transaction in real time. The report by Bitwise tells of how most exchanges are faking trading volume. Bitwise suggests that the bitcoin market should be orderly and efficient with perfect prices. They saw a daily report of Bitcoin trading volume of $6 billion. That doesn't sound weird at first until you start to see the exchange that have the largest trading volume and you will discover that you have even heard about most of them. The top listed exchanges show their trading volume in hundreds of millions while exchange like Coinbase pro shows $27 million daily.

Obviously, there is something wrong going on right here. There are some ways to find out if the exchange is faking the trading volume. A fake exchange often receives matching buy and sell orders, that is they often have equal numbers of buys and purchases. A lot of exchanges are lying to you, they are empty exchanges that only a few people are buying from it. Bitwise studied 81 exchanges and it is only ten of them that are real exchanges. Most of them use bots to create action in the platform and the interesting part of it is that that does not hide it.

Those exchanges are fake trading to attract more users because if people see that an exchange has a high trading volume, they will want to trade on that platform. The marketcap problem impacts everyone, we were told that the total crypto market cap at its peak was about 3 trillion dollars but that figure may be the. If we remove things like dormant tokens, lose coins, those heard by non-profits and foundations, and tokens to pay for niche products we will see that the market cap will drop. A bigger problem is wash trading, it is basically made a financial transaction but its owner doesn't change. It is just an asset of yourself while pretending someone else did it. Any manipulation that can be done in whatever ways, those are just for a short while. Of course, you are pump crypto we wash trading but real people do not trade it, eventually, the thing finally equals out.

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