After the 2017 crypto boom led by BTC, there were accusations that a few parties including one major exchange might have manipulated BTC prices, triggering the surge. This was a fairly damaging report and its implications continue to be felt since it surfaced. The market might just have to prepare for another hit as a new report has just been published and it suggests that nearly 90% of the volume exchanges claim to have moved could be manipulated. According to the researchers, who based their research on analyzing traffic on the exchanges, nearly 75% of the reported volume could be doubled.
Small Exchanges With Big Numbers
The researchers from startup Tie went ahead to compare the near $600 weighted average trading volume per user visit in leading exchanges such as Coinbase Pro, Binance, Kraken, Gemini and applied it to other smaller exchanges. By doing so, they found out that exchanges like Coinbene, BW, ZBG, BitMax were reporting volumes 10 times higher volume than expected. Notably, U.S exchanges and Binance volumes were in order.
“If each exchange averaged the volume per visit of CoinbasePro, Gemini, Poloniex, Binance, and Kraken, we would expect the real trading volume among the largest 100 exchanges to equal $2.1 billion per day. Currently, that number is being reported as $15.9 billion.”
Any Implication On Prices?
Although notable exchanges such as Binance have proven themselves to be genuine, bad actors continue to shed a bad light on the industry. New investors will want to know that exchanges are trustworthy before choosing to invest through them and a report that the exchanges have been manipulating volume only pushes them away. Despite the negative announcement, BTC is not expected to react since the top exchanges which have always had the most influence have not been implicated in the report.
At the time of press, Bitcoin [BTC] is signaling sideways action after being stuck in the $4,000 and $4,050 position for the last couple of days. With volatility now significantly down many are expecting a bullish move in the short-term. Additionally, BTC’s dominance is still down, stands at 50.8% at the time of press, which signals many investors have moved to altcoins, yet another bullish signal.