Bitcoin Forum

Hey guys, so i've read a new report on how much of the exchanges volumes are just wash trading and the numbers are way too high for what real users do>.

This is pretty concerning, since the market might not be nearly as stable and mature as we think, it might all be manipulated.
What do you think of the current state of big exchanges and price manipulations that we experience?

my source: https://www.blockchaintransparency.org/reports/ (https://www.blockchaintransparency.org/reports/)

I think if it was the case, the impact of price is overrated. I remember there was a big conspiracy of chinese volumes being mostly faked and basically coming from exchanges transacting back and forth.

Once the chinese government (PBOC) started clamping down on them and banning a bunch of exchanges, people were calling (once again) a doomsday scenario where we wouldn't recover from.

And so the volume went down, and we all know what happened to the price (look at the charts around when these news were released).

So bottomline is: I wouldn't worry too much. There is enough demand for Bitcoin with or without fake volume and the supply is limited, simple math.

I agree, the volumes are high anyway and the demand for bitcoin will always be high.

On the other hand, It's sad to see that people are faking volumes to drive demand...

Everything in this world is being manipulated by some powerful people out there. So, the crypto market is not all different from it and it is more prone to manipulation since it is decentralized.

Supposed to say the same thing but by the way this is short and direct to the point insight.

Anything is manipulated and cryptomarket isn't really exempted on such thing.We have seen forex and stocks do have those price manipulations to drive up a trend and theres no different also into this market.
Get used to it yet these exchangers can possibly manipulate prices.If you can able to spot out then get out if not then try to utilize it- if you are just a trader but if you are just an observer then this thing wont really be a big deal.

I think the market has been manipulated for a long time, and some people might just realize it.

There is manipulation with wash trading but I don't think that is very big as to manipulate numbers regarding general market. Lots of things are scary in this market  :)

And so decentralize is a two edge sword. But I do believe what the above users said, there is just so much demand for BTC that it doesn't matter whether the manipulation of those exchanges are true.  If the market has been manipulated for a long time, I guess they are also responsible for making us all richer. I say thanks to that. There must be a fight over who manipulates better among those who wants to.

https://i.imgur.com/YkuDC2K.png

What a surprise..../s

But looking at the bottom of the page, we see exchanges with a few million in trade and approximate real trade in hundreds of $.  ;D ;D
I'm willing to bet that even the result showing 30% of the current volume being real is too good to be true, I would think it's way below 10%.

I don't think this brings up too much concern. If you look at the list, most of the US based (and all of the major US based) exchanges appear not to be overstating their trading at all according to this. I highly doubt that any amount of fraud by the Chinese exchanges could inflate the price to the point where they are bringing up the rest of the world. Everyone knows not to trust China to begin with, and when you add crypto on top of a general culture of fraud and theft, you have even less reason to trust any of the Chinese exchanges. But boy, look at the suspected over-statements:

• Huobi: 12.5x inflated
• Okex: 19.2x inflated
• HitBTC: 5.3x inflated
• Upbit: 11.0x inflated
• Bitbay: 3.1x inflated
• Coinex: 68.6x inflated

If I had an account with any of these, I'd immediately close it and withdraw all coins. They cannot be trusted at all. But ultimately, I wouldn't be concerned that fraud by these exchanges could tank the whole system. There's enough other major exchanges operating trustfully to conclude that there is a baseline demand for crypto that is sufficiently robust to prevent too much of a collapse.

The report actually comes with something to ponder about really because it initially provided an overview of what the methodology that is used compared to the current one how its believed to be the right one to bring about transparency to the market. It is not out of place for exchange sites to have be involved in some form of mop up in other to show some view that is different from the actual happenings, to me, its not a determining factor to conclude that the entire market is being manipulated and to give one a need for concern for the following reasons

1. The report only focus on a means of data gathering believed to be truly transparent, but this model has not been generally accepted anywhere to be the right way to go about this. Which means if another research is carried out tomorrow using another methodology, it renders this one useless.

2. I didn't read from the report that a response is solicited from exchange sites accused to be involved in the alleged shady behaviour to hear their own side of the story before going out publishing what its felt to be right which could be as a result of not getting the right information.

unless you think it is the exchange itself making the orders and increasing the volume, the Wash Trading is real trading. there are real people buying real coins with real money and paying real fees for each trade.

i think in the end the real question is: does it matter?
in stocks market or even in altcoin market where there are different choices you may look at the volume as an indicator. for instance you may go to a stock that has a higher volume that day. but when it comes to Bitcoin, people don't choose it because it had high volume!

among bitcoin exchanges like the Chinese ones which were reporting ridiculously high volumes it was done for competition so that you choose exchange 1 over exchange 2.

coinmarketcap says trading volume was $4.5 billion. lets say half of it is Wash Trading volume! do you think it would matter if volume was $2.25 billion? you think people would stop investing in bitcoin just because the volume is lower and would invest a lot more because the volume is higher? i don't think so.

you need to know all of these trading activities all have a very high risk and can make a lot of people afraid, the most important thing is that you have to be able to take advantage of cryptocurrency price movements to be able to get a lot of profits.

What do you mean by "stable and mature"?
What are the factors that make a market stable and mature?There's no such thing as a stable market.The markets are always unstable,that's how traders make their profit.I'm pretty sure that a big percentage of the crypto trading is run by trading bots and there's nothing wrong with that.The are rumors about market manipulation and fake trading volumes since the creating of cryptocurrency exchange platforms.
I don't think that anyone can do anything to stop them from manipulating the crypto prices.

Yeah, that's probably true. I think we're just ignoring it.

We now know that Bitcoin's price was manipulated using USDT at the end of last year (read about it here: https://www.bloomberg.com/news/articles/2018-06-13/professor-who-rang-vix-alarm-says-tether-used-to-boost-bitcoin) but exchanges also faking the volumes... That's just sad.

This isn't really a decentralization issue because most of these trades happen off-chain. It's a regulation issue, and even then, regulated markets also suffer from manipulation.


I can't speak for him, but he probably meant the $6000 resistance is a byproduct of artificial trading and manipulation, meaning Bitcoin's price should be lower than it currently is. I don't think it really matters in the end (though I'd still want to stop it) but I could see how it could concern traders.

that is true, being decentralize is more of a dual blade for every user, either you earn when they earn and loose when they loose, what matter is how much you can afford to, it depends on how much we invested, it is a one time punch for the big holders, it is either they hodl the sell big, while small time users never hodl but panic sell instead, while the demand is high but the supplies are low, if being manipulated, we have to take advantage of it. one punch for us, 10x for them, make sense.

The conclusion is ultimately wrong. Trading volume is a significant data point when considering price movements. Higher volume gives the appearance of more consensus and legitimacy that the price is sustainable. That's why wash trading is potentially an important issue, because if some of the data is faked or isn't reliable, it undermines confidence in the systems.

If a stock goes up in value from $5 to $10 dollars in a single day, that's a huge gain; 100%.  If the average daily trading volume is 100,000 shares and it goes up 100% on a trade volume of 25,000 shares, this is a potentially important data point telling us the price is not widely accepted by the market to be indicative of true value. It could be one trader who is out of his mind or will ultimately be proven to have greatly overpaid for his shares. However, if the price goes up 100% on daily trading volume of 500,000 shares, we now have a 5x increase in average trading volume, which tells us that the number of people who are consensus over the new valuation is significantly higher and the price increase is more likely to hold. In investing, market consensus is pretty important, since the wisdom of the crowd often prevails and the odds that everyone is wrong diminishes compared to one guy.

This is why trading volumes matter. The fraudulent trading volumes by the Chinese exchanges are meant to give the appearance of more consensus and to trick investors into trading more so they can earn more in fees. They are obscuring the risks of investing by hiding what may be far more shallow markets that would keep risk-averse investors away. It is not defensible in any way, and not a small deal.

but how much of the trading volume do you think is fake/wash trading?
for example from $2.25 billion is it a small percentage like 1% ($0.02 billion) or it is a large percentage like 60% of it? i'd say it is not big enough to become a concern.

as for Chinese exchanges they were offering 0 fee trading which automatically increases the volume, it doesn't have to be fake. for example you could buy at 5000 CNY and sell at 5001 CNY and make profit but with fee in normal exchanges you should have sold at 5021 CNY and that reduces the number of trades and volume drastically. you still can't call it fake though.

As a matter of fact, it does. I remember this epizode of Silicon Valley, where the team's application wasn't used much, but one character payed people in Bangladesh to simulate usage by making minimum of actions on multiple accounts. Wrong trading volumes deceive people, who then make their own decisions on how much to trade. Incorrect impression about the market might lead to huge disappointments in the future. Moreover, some exchanges are pushing forwards in the charts by providing fake data. What's good, though, is that IMO the suspected exchanges are not the top ones, even though the lists might say otherwise. LBank, ZB, Bibox.. I've never even heard of this ones.

Agreed, we may want to hide away from it, or possibly just not decide to pay any attention to it, but the fact remains that one way or the other, the big cats are always around the corner, squashing the small rats. Manipulation is even more prone in a space where regulation is not even available, and everyone is pleased to do whatever they like without any repercussion at least for now.

Some of the things we get to see here are just some things we cannot see in regulated markets obviously. The volatility is still there anyway, but I guess it is still one of the things we will get to contend with for the mean time.

The price of cryptocurrency in the market will never become stable because there are a lot of people who are selling and investing depending on the situation so you should always expect drastic changes.

Wow, thank you for such an interesting link! However don’t overreact so much, i think if we look at traditional stock markets we might see the same thing. May be in lower scale, but if you read financial news and follow the financial markets there are some manipulations that happen all the time. Financial markets including "baby" crypto might try to be transparent, but that will never happen to an absolute extent, as there will always be entities that will try to manipulate the market, following their own benefit.

It is no longer news that the market is manipulated in a lot of ways. This is a decentralized space and there is no regulation in place that would be able to put manipulators in check and the big guys are always going to be there to do their thing to make as much as possible.

Nevertheless, there is nothing much to worry about if there is manipulation or not, what is important is that once we start seeing real life usage of bitcoin being used in form of a currency and people start seeing the real value, a lot of things will change.

You are not wrong! Sure, there are some few manipulations since there are the big whales in any market anyway, but we also have to understand that something’s that can be done in this market and some would go scot free is not something you will do in stock market and go free with it since it is a regulated market and you would not want to do something that would land you in jail as manipulation is a serious offense.

I see that there is hundred percent some sort of the manipulation going on all the time and this is not going to stop ever. The exchangers are always thought to be bug manipulator of the prices as they are themselves holding big chunks of coins and thus as the users go on buying and selling these coins they make perfect money by getting it from the purchase and selling fees given by the users. Now no one will believe on this fact but lets just see the maths. There are more than 10k users on any single exchanger and they makes more than thousands of dollars transaction every day and thus pour huge money on the exchangers wallets. Why would not they will manipulate the prices if they want to earn more from this.  ;)

I can agree that there are some manipulated volume statistics on certain exchanges for the marketing sake. Exchanges are not that much reliable and better not hold your coins on them.

I wouldn’t like to sound selfish, but the main important thing is if it’s beneficial to the majority. (both me and you). So whatever it is they are doing by manipulating the market, it’s left for us to be very much careful on how we deal with this. This is why some people are fighting for regulation, but trust me, if there should be regulations and government should take over, the it’s probably going to be worst.

This has been like this for years now, none of the exchanges you see right now neither the ones that has been running for years had the same amount of volume they advertised.

Volume is what makes an exchange big or small, what makes them known and heard from people and the higher your volume is the higher number of people hear your name and come looking for, since we can't really know which one is doing it how much I have stopped looking at volume for selecting my exchange.

I just go with the most known from what I hear on forums and chats and go with that. Now binance may not be the best website out there or even have highest volume, I wouldn't know if its true or not, however I know everyone knows them and they are very known so I use them.

Apart from people investing, selling and all that you have said, it is not news that manipulation is bound in this market most especially for the fact that it is decentralized.
You think what we saw last year was a normal level of demand, no way! That was a manipulated pump and some news has been raised so far on wash trading, spoofing and some other forms of manipulation in the market which normally would not have been the case if the market is regulated.

Yes some months before,it was complained that Bithumb a big Korean exchange did wash trading to manipulate the price of Bcash and it was the reason for such a high price of Bcash reached at that time challenging bitcoin.It is illegal but it's done by some exchanges.

The highest price in the day was $ 6,536, the lowest price was $ 6,409. A common explanation for the market crash yesterday was the result of Goldman Sachs's abandonment of the plan to offer technical trading counters number.

The market prices is based on supply and demand so obviously it was volatile, and we also needs this volatility in order to earn profit in the future, it was better to always read news regarding cryptocurrency growth to determine the future prices.

big exchanges are not something to watch out for at the moment. since both sides are large buyers who may be trying to mislead

I Hope all the regulation of the crypto currency comes quickly because all the inestability atound here id the main reason investor run away from good proyects all around the world the one Who are here because id the easy acceso yo the world Of new opportunities borning everydatto new proyects And the development of the new era which is already here

Its hard to say that market being manipulated because cryptocurrency is decentralized and no one can control the supply and we know price always determined by supply and demand.

Will,in this situation only things that we can do is hoping thats this are not true and this wash trading are not happen,because the first affected are us lowest investor of cryptocurrency,especially now thay market is still bleeding  the more the exchanges manipulate the price,the more we are loosing value of our profit,therefore we should aware into this scenario because many low traders have been affected.

Sure, the fact that it is a decentralized market and the fact that there is absolutely no regulation yet in place that would really bring about any serious discipline to the market or people tending to not do things however they like or going against some rules such as market manipulations, we will keep having this market manipulated until that regulation is in place.

Most of the things we get to see in this market are something that is not possible to see in the stock market as that can be extremely not so good for whoever tries to manipulate the market either knowingly or unknowingly, and I believe in the long term, this is something we will get to see here.

Obviously, the lower ones down the chain who are actually looking for ways to get rich quicker and normally the ones who at the end of the day, usually get to panic easily due to some market movement downward or pretty much join FOMO when the market is moving up speedily. This is a decentralized market and before we will get to start seeing the possibility of regulations, I am sure the whales and institutions would have made the weak hands suffer for it by making them to sell at loss most of the time and making people to get greedy so they can keep increasing their stash.

I was surprised as well, some of the exchanges 'wash trade' their volume tens or hundreds times on a daily basis (the most gruesome example is LBank overstating its volume 4400 times according to the research). It might not be critical for trading during quiet days but you don't want to be inside such a market when volatility spikes.

Usually we can check on what the real trading is from a collective increase and decrease in the price and the volume which means you can relax by just looking at it. Yes exchanges mostly do wash trading to show boat and promote themselves and tell everyone they have a lot of volume however that doesn't change the global volume that much.

If you follow the volume closely whenever price of bitcoin goes up the volume is up as well and whenever bitcoin goes down the volume already went down. Which means from the movements of volume we can still gather some stuff however not all. You also need to check the new exchanges that have absurdly high volumes and take that out from the calculation.

I don't know about these reports. Maybe we're juat blowing this up out of proportions to a point that we're screaming end of the world. I guess i still believe in crypto currency and that it would be the only currency on the market in the future. Maybe a few years will pass by when all of this is realized but it will happen.

No one is screaming the end of the world or blowing things out of proportion, it is just the way things are when it comes to market manipulations and considering the fact that this market has been a bit of an unregulated space or mostly unregulated actually, we have gotten to see a lot of people out of greed do whatever they like and that includes wash trading.

Nonetheless, I know all these won't last forever and even at that with all the possible manipulations, it has never stopped the market from growing, but indeed just stylishly eliminating the weak hands.

If that's the case for those big exchanges that the prices in the market is manipulated then it would not be good for the community. But I think it's not manipulations but it is the reality in this ever changing world of cryptocurrency.

it is very unlikely that an exchanger will do this. i think they know to work professionally and certainly won't damage their own reputation. of course if it is right to do and consumers know, then member will immediately leave it

I have always thought that the volume that we see is not real and that is inflated and exaggerated by exchanges, and while that is important I do not see a great effect in the price of bitcoin, bitcoin is by far the strongest cryptocurrency in the market and even if the volume was cut in half there will not be any bad effects that will affect bitcoin, however it is entirely possible that this could affect the price of altcoins, because as we know those coins are not as strong as bitcoin.

And since the demand of most coins is very low finding out that the volume is mostly fake will undoubtedly shake the confidence in the market in those coins and could make them disappear or at least to lose a lot of value.

Exchanges will do everything they can to have themselves rank up based on volumes on sites such as CMC, because that's where most of the traffic comes from nowadays.

Asian exchanges are amongst those who cheat the most with their volumes, where OKEx and Huobi are the absolute leaders in that field.

People know it happens, they simply don't care. As I said above, sites as CMC are very important for exchanges, and for that reason will do everything they can to retain their top 10 spot, because that's what traders look for and consider 'safe' enough. The downside of this is that compliant exchanges can't compete with cheaters because of how much there is to lose for them.

Out of the exchange top 10, 8 exchanges are unregulated. The other 2 might be as well, but I'm not sure. No wonder the SEC isn't interested in this nonsense.

I was confused back then how that volume easily dragged down and then basically goes up that easily. Not until I've heard about wash trading. The manipulation of investors which will mislead some of the traders. If you are unfamiliar with this kind of thing, it will be a great loss for you.