Nearly 50% of Exchanges Show Less than half of the Claimed Real Trading Volume— Wash Trading Research (1st Part) Shows

TokenInsight
Oct 9 · 6 min read

Tokeninsight has just released its Wash Trading Research (1st Part) to give you every important detail you need to know in the exchange industry. The report provides insights into the industry landscape, trading volume, methods, market share, and many other exchange-related topics.

Key Points:

✅ According to a report submitted to the U.S. SEC by Bitwise in March 2019, “wash trading” is currently a very serious problem that exists in the cryptocurrency market. It was stated that true trading volume of the overall market accounted for only roughly 4.5% of reported volumes, and only 10 exchanges have reported figures representing true trading volume. The report exposing the wash trading was made public by the research institution for the first time, and it shocked all the market participants.

In resistance to Bitwise’s report, most cryptocurrency exchanges have made significant efforts to advance their “wash trading” algorithms to avoid further detection. Some exchanges have even gone as far as developing technical improvements directly from the detection methods published in the Bitwise report. All this has led to even more fragmentation in the market and confusion for traders in understanding accurate market volumes.

✅Alameda Research, a market maker and provider of over-the-counter trading services, published a research report in July 2019 and has continuously released market reports that monitor true trading volume data. Their results show that 66.4% (Sep. 25, 2019) of the trading volume from the cryptocurrency market is considered to be wash trading. Due to the limitations of their evaluation model, Alameda Research has only been able to draw three conclusions to the authenticity of exchange trading volumes: reliable, 50% reliable and unreliable.

✅The difficult part to identify the wash trading is unable to collect data from exchanges for regular investors.

✅As a leading digital token rating and research agency, TokenInsight spares no effort to establish its own data center based on the interests of investors and has recorded the transactions of 30 mainstream exchanges in periods from 10:30 on June 26, 2019 to 23:55 on July 28, 2019. Later, we conducted qualitative and quantitative analysis of the “wash trading” by using a power-law based quantitative model and two comparative analysis methods.

✅According to our analysis, some of the non-top-tier exchanges continue to show serious “wash trading” issues.

✅Wash trading detection and monitoring will be launched on TokenInsight’s official website in the upcoming future. Individuals can use this page to view the real-time wash trading volume of cryptocurrency exchanges. As we continue to develop our models for identifying wash trading behavior, TokenInsight will continue to provide complimentary reports that supplement our findings to the market.



About TokenInsight

TokenInsight is an independent third-party data analytics organization whose focus is to provide accurate information and ratings on companies developing in the blockchain industry. TokenInsight is dedicated to providing accurate ratings, research, and analytics that contribute to intelligent financial decisions and market transparency.

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TokenInsight

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Leading Data&Tech-driven Blockchain Financial Institution.

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