It turns out, most exchanges fake their daily trading volumes…
In a recent Bitwise report posted on Twitter, research revealed that of the 81 cryptocurrency exchanges that were examined, only 10 major exchanges report genuine trading volumes. Big names such as OKEx and Huobi purportedly inflate their numbers, presumably to attract more traders and to fetch large listing fees from hopeful crypto projects.
The major exchanges that appeared to be accurately reporting daily volume greater than $1 million USD are listed in the following image:
This means that nearly 95% of all reported trading volume on services such as CoinMarketCap is likely to be fake, with only a few major regulated exchanges providing the majority of trading in the world on a daily basis.
On the positive side, the regulated exchanges showed authentic trading volumes with much tighter values in terms of arbitrage between exchanges. Additionally, once adjusted for these actual volumes, the daily BTC trading volume is actually very healthy when compared to the BTC market cap, similar in proportion to gold’s volume to market cap ratio, Bitwise notes.
Bitwise also notes as a positive:
And, when you remove fake volume, CME and CBOE futures volume is significant ($91M), especially compared to the real spot volume (35% for Feb 2019).
This is good news because it means CME— a regulated, surveilled market— is of material size, which important for an ETF.
So despite what seems like negative news regarding exaggerated trading volumes, Bitwise points out that regulated exchanges could actually be providing some long-term benefits to the legitimacy of BTC markets and the potential for greater adoption and growth through future approval of one or more Bitcoin ETFs.