According to reports, the Blockchain Transparency Institute (BTI) insists that every major digital currency exchange with the exception of Binance and Bitfinex are falsifying trade volume data. This information became known after the institute released its Exchange Volumes Report for December this year. The report claims that the rest of the exchanges are involved in wash trading. This means inflating trade volume figures, which means they are providing inaccurate or false data.
This report means that only two out of the twenty-five top virtual currency exchanges have actually been reporting accurate trade volume data. Providing false data to the public amounts to a difficult situation for the exchanges involved.
Evidence Implicating Major Exchanges of Wash Trading
According to the Blockchain Transparency Institute’s report, there is clear evidence that major crypto exchanges have been practicing wash trading. The institute stated following the release of its Exchange Volumes Report for December:
“While compiling our Exchange Volumes Report for December, we have taken a deep dive into unique trading pairs on crypto exchanges that are showing clear signs of wash trading. This has always been the goal from the onset. However, we wanted to do everything possible to ensure that the data we had to work with was as accurate as possible. Hence, we have been updating and perfecting the algorithms during the past three months.”
Bitcoin (BTC) Price Today – BTC / USD
Order Books, Volume Data Points Analysis and Initiating High-Frequency Traders
The Blockchain Transparency Institute also stated that:
“During the three month time period, we have spent countless of hours watching order books, speaking with market makers, trade surveillance consultants, analyzing volume data points, and speaking with high-frequency traders. We have so far collected a large amount of data on these exchanges, and we now feel very confident to start releasing the figures we realized.”
The BTI also stated that it had calculated the actual trade volume of the CMC top 25 Bitcoin (BTC) trading pairs and discovered that most of the volume of the pairs are under 1% compared to what was reported on CMC.
“Before publishing our report, we have calculated the actual volume of the CMC major 25 BTC trading pairs. The majority of these pairs have an actual volume of just under 1% of what they originally reported on CMC. At this point, we have to say that only 2 of the top 25 major pairs have not been grossly wash trading their trade volume, and they include Binance and Bitfinex.”
Here’s what you need to know about wash trading; wash trading is a type of market manipulation that involves the investor simultaneously selling and buying the same financial instruments in order to create or form misleading or artificial actions in the market.
Understanding the Methodology of BTI Reports
How are the BTI reports determined? The BTI reports have actually evolved from collecting simple web traffic to include data collected from digital asset exchanges based on mobile app usage as well as API trading. The team at BTI says it has explored specific trading pairs on crypto exchanges for its December Exchange Volumes Report.