Wash Trading Dominates Bitcoin Volume, What Does This Mean For Price?
October 06 2022 - 7:00PM
NEWSBTC
The daily bitcoin trading volumes come out into billions of dollars
every day, with hundreds of thousands of daily transactions being
carried out. It is one of the reasons why bitcoin draws the most
investors, given such high trading volume and good depth across all
exchanges. However, some on-chain analyzers have been diving into
the blockchain to explore the daily BTC volume, and the findings of
this study have been alarming. More Than 50% Fake Volume Mostly, in
the present market, there is always some amount of volume for
digital assets that are actually fake. These fake trading volumes
are to make a digital asset look better than they actually do to
make other investors put money into them. Smaller-cap altcoins are
usually guilty of this to a large extent, but it seems the largest
cryptocurrency by market cap is not left out of this. Related
Reading: Bitcoin Shocker: Lightning Network Capacity Reaches 5,000
BTC Bankless Times carried out a study into the daily bitcoin
volume for the year 2022 and found that the majority of the volume
was actually fake. The study showed that 51% of bitcoin volume
across various exchanges was actually a result of wash trading. BTC
maintains above $20,200 | Source: BTCUSD on TradingView.com For
those who do not know, the act of wash trading an asset is illegal
because it creates a false narrative about that asset to make
investors put their money into it. This way, they are trapped, and
the wash traders walk off with millions of dollars in profit,
depending on how large the scheme is. The study unveiled that
stablecoins were actually contributing largely to this wash trading
volume. This means that the digital asset is seeing up to $10-$15
billion in fake volume across exchanges, giving rise to concerns
about how this affects the cryptocurrency. Impact On Bitcoin Price
To the unsuspecting eye, there might be no manipulation going on
when it comes to the price of bitcoin, but this report from
Bankless Times actually shows that the digital asset is being
largely manipulated. Wash trading can easily affect the price of a
digital asset by making it look like a profitable investment.
Related Reading: Regulatory Scrutiny Threatens Ethereum’s Rise,
Will It Succumb Under Pressure? So say bitcoin is being wash traded
across multiple exchanges; it deceives investors to believe that
there is a large demand for the asset, leading them to purchase it.
Thereby raising the digital asset of the cryptocurrency in the
process. With such a large volume of trading volume reportedly
being fake, it begs the question of if the current BTC price is
actually accurate. A real volume of less than 50% of reported
volumes would put the digital asset’s value at around $12,000, if
true. Featured image from Forbes, chart from TradingView.com Follow
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