There is a discrepancy between the data that cryptocurrency exchanges are reporting and the actual numbers posted, according to the data from 157 exchanges reviewed.
According to a report by Forbes, more than 51% of trade exchanges are posting fake numbers, a result of poor surveillance and limited regulation in the space. According to data researched, a number of smaller exchanges in the market were actually looking at 95% less than the Bitcoin trading volumes they were posting. Other larger exchanges, such as Binance and Bybit are reportedly posting more than double their analysed figures. The author of the report, Javier Pax noted that this means the global trading volume of the leading cryptocurrency is far less than is being reported:
“More than half of all reported trading volume is likely to be fake or non-economic. The global daily Bitcoin volume for the industry was $128 billion on June 14. That is 51% less than the $262 billion one would get by taking the sum of self-reported volume from multiple sources.”
Does crypto need more regulation for volume trustworthiness?
According to Pax, one of the leading issues at play for this is the absence of standard regulations across the industry. Even Bitcoin, as the most relegated token in the space, runs the risk of exchanges posting false trading volumes. In his report, Pax added:
“If reported trading volumes for Bitcoin, the most regulated and closely-watched crypto asset around the world, are untrustworthy, then metrics for even smaller assets should be taken with even greater grains of salt. At its best, trading volume is one of the most measurable signs of investor interest, but it can be easily manipulated to convince novice investors that it has much more demand than it actually does.”
— Forbes Crypto (@ForbesCrypto) August 26, 2022