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Author Topic: Is There Fake Trading Volume On Bitstamp?  (Read 1459 times)
bitcoinmarkets
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November 18, 2015, 06:38:54 AM
 #1

Source here: http://www.bitcoinfuturesguide.com/bitcoin-blog/is-there-fake-trading-volume-on-bitstamp

Bitstamp is a well-established Bitcoin exchange, operating since 2012. It is one of the top five USD volume bitcoin exchanges and has some degree of influence among traders, playing second fiddle to Bitfinex.

For a while now, it has been known that the Chinese exchanges, particularly OKCoin, are involved in faking trading volume. Bobby Lee of BTCC has spoken openly about this. The ex-CTO of OKCoin admitted as much in a statement made after leaving the company. The famous "volumizer" running on their futures platform is known to amuse traders in slow times of market activity, as seen below:



But we knew that the Chinese fake their volume, with their 0% fee model being the main culprit. This fee structure allows for wash trading between customers, with or without the knowledge of the exchange. However, we would not expect Western exchanges to behave in the same manner. But many traders are pointing to the charts and say there is something going on over there, see Exhibit A:



The orange line is Bitfinex, which is how a normal exchange would behave when there's no overal market turmoil The yellow line is Bitstamp. Notice how within the one hour period in the chart, there is a large degree of swinging between the spread, $2.5, for no particular reason. On a normal situation you have people that put their bid or offer in between the spread, but there appears to be just constant orders hitting both sides, causing these choppy swings.

In the chart below, note how during periods of low volatility, multi-thousands of coins are exchanged, exceeding the volume during a significant price change.



This may be coincidence, it may be nothing. But traders who sit at charts all day notice irregularities like this, and it is following a similar pattern as has been observed in China, which essentially has confirmed fake volume. This could easily be going on without Bitstamp's knowledge, between marketmakers that they have no control over.

Bitstamp had offered 0% fees after they were hacked earlier in the year, which would make some sense. Their marketmakers could have a special deal where they receive a rebate for volume delivered. This is all speculation among traders, and nobody knows for certain. But there's enough strange action going on with their price action and volume changes that it has been arousing suspicion.

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November 18, 2015, 08:08:59 AM
 #2

the source and picture look so real,i never think about fake trading volume,its horrible..how if there was many exchange do that,not just bitcoin,but other crypto,i think its a bad news for trader. and talking about fake volume,i ever trade a fake volume coins,and its make me loss. lets this is not happen in several exchange..

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November 18, 2015, 08:18:54 AM
 #3

it could be especially after they were hacked, to rertrieve a portion back of their customers, it make sense, since before they were the number one among the foreign exchange, excluding chian of course

now not so much, they lost quite a big number of people
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November 18, 2015, 09:50:26 AM
 #4

Is it safe to trade on OKCoin?
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November 18, 2015, 10:13:15 AM
 #5

Is it safe to trade on OKCoin?

it should be, you can try with a slow amount first like for everything that you think it is not safe

they had fake volume as well, in the past and might be true even today...
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November 18, 2015, 10:17:22 AM
 #6

My opinions is that Bitstamp is faking some of their trade volume it only takes a few looks into the Wall Street Observer thread over the last few days to see Chartbuddy recording very small spreads of a penny on an hourly basis.
If their is commissions involved then it would make sense for someone to do that as well either way it is suspicious.
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November 18, 2015, 10:26:24 AM
 #7

Fake volumes are basically happening on any significant exchange you can think of. Bitstamp is definitely no exception. The important difference in faking volume between Bitstamp and Chinese exchanges are the amounts of volume. China doesn't do much to hide their beyond insane volumes.

My eyes are always pointed to the live orderbook and live trades Bitstamp makes every day, as it is my exchange of choice. It doesn't happen every day, but from time to time there are no sense making trades happening that are worth up to 2000BTC and some times even more. This can be a sign of faking volume, but we obviously have no proof for that.

Nowadays, faking volume to entertain traders have been top priority for a lot exchanges. One exchange does it more than the other. We can't do much about it other than just continue with that we are doing. Just ignore it.

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November 18, 2015, 12:07:08 PM
 #8

Fake volumes are basically happening on any significant exchange you can think of. Bitstamp is definitely no exception. The important difference in faking volume between Bitstamp and Chinese exchanges are the amounts of volume. China doesn't do much to hide their beyond insane volumes.

My eyes are always pointed to the live orderbook and live trades Bitstamp makes every day, as it is my exchange of choice. It doesn't happen every day, but from time to time there are no sense making trades happening that are worth up to 2000BTC and some times even more. This can be a sign of faking volume, but we obviously have no proof for that.

Nowadays, faking volume to entertain traders have been top priority for a lot exchanges. One exchange does it more than the other. We can't do much about it other than just continue with that we are doing. Just ignore it.

Exactly this! The competition has become fierce! Nowadays we have over 10 good Bitcoin exchanges. Just two years ago you had about two! More exchanges means that customers and earnings get dissipated between many players now.

So yes, exchanges are doing everything in their power to preserve their customers and of course to steal them from the others!

Nothing surprising here!
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December 24, 2015, 12:52:59 PM
 #9

Source here: http://www.bitcoinfuturesguide.com/bitcoin-blog/is-there-fake-trading-volume-on-bitstamp

Bitstamp is a well-established Bitcoin exchange, operating since 2012. It is one of the top five USD volume bitcoin exchanges and has some degree of influence among traders, playing second fiddle to Bitfinex.

For a while now, it has been known that the Chinese exchanges, particularly OKCoin, are involved in faking trading volume. Bobby Lee of BTCC has spoken openly about this. The ex-CTO of OKCoin admitted as much in a statement made after leaving the company. The famous "volumizer" running on their futures platform is known to amuse traders in slow times of market activity, as seen below:



But we knew that the Chinese fake their volume, with their 0% fee model being the main culprit. This fee structure allows for wash trading between customers, with or without the knowledge of the exchange. However, we would not expect Western exchanges to behave in the same manner. But many traders are pointing to the charts and say there is something going on over there, see Exhibit A:



The orange line is Bitfinex, which is how a normal exchange would behave when there's no overal market turmoil The yellow line is Bitstamp. Notice how within the one hour period in the chart, there is a large degree of swinging between the spread, $2.5, for no particular reason. On a normal situation you have people that put their bid or offer in between the spread, but there appears to be just constant orders hitting both sides, causing these choppy swings.

In the chart below, note how during periods of low volatility, multi-thousands of coins are exchanged, exceeding the volume during a significant price change.



This may be coincidence, it may be nothing. But traders who sit at charts all day notice irregularities like this, and it is following a similar pattern as has been observed in China, which essentially has confirmed fake volume. This could easily be going on without Bitstamp's knowledge, between marketmakers that they have no control over.

Bitstamp had offered 0% fees after they were hacked earlier in the year, which would make some sense. Their marketmakers could have a special deal where they receive a rebate for volume delivered. This is all speculation among traders, and nobody knows for certain. But there's enough strange action going on with their price action and volume changes that it has been arousing suspicion.

I don't see this as evidence of volume faking, just conjecture. There needs to be more data to support the conclusion, one data point doesn't even make a correlation.

Quote
In the chart below, note how during periods of low volatility, multi-thousands of coins are exchanged, exceeding the volume during a significant price change.

The conclusion that there should be more coins exchanged during high volatility, therefore anything else is suspect, isn't a sound conclusion. You have one data point here showing the contrary, which is not enough to make an argument, and further, the volatility could be higher because of the low volume. When the volume is thin, one trader with a large order has a much larger effect on the price and can move the price much more significantly than during periods of high volume where his actions are diluted.

This chart doesn't show evidence of fake volume, it shows a correlation between low volume and high volatility, which we already know to be logical.


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      BITCOIN SPORTSBOOK     
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December 24, 2015, 03:17:44 PM
 #10

the source and picture look so real,i never think about fake trading volume,its horrible..how if there was many exchange do that,not just bitcoin,but other crypto,i think its a bad news for trader. and talking about fake volume,i ever trade a fake volume coins,and its make me loss. lets this is not happen in several exchange..

The picture is created by Bitstamp or others, don't let that fool you!

It would be shitty if they're manufacturing volatility, but the Bitcoin market is still the "wild west", there's little anyone can do about it and I can imagine why these companies would want to fake activity if it goads people into making a trade. There's an easy way to get around it, use an objective third party source (not from China) to verify or be a primary source for transaction activity data.

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December 24, 2015, 07:03:12 PM
 #11

the source and picture look so real,i never think about fake trading volume,its horrible..how if there was many exchange do that,not just bitcoin,but other crypto,i think its a bad news for trader. and talking about fake volume,i ever trade a fake volume coins,and its make me loss. lets this is not happen in several exchange..

The picture is created by Bitstamp or others, don't let that fool you!

It would be shitty if they're manufacturing volatility, but the Bitcoin market is still the "wild west", there's little anyone can do about it and I can imagine why these companies would want to fake activity if it goads people into making a trade. There's an easy way to get around it, use an objective third party source (not from China) to verify or be a primary source for transaction activity data.

Well, if they are faking data, it's only so long until they run afoul of regulators. They may be unregulated, but they take US customers, and if they're running a dishonest or fraudulent enterprise, it won't be long before they're banned in the US. The honest companies are going to rise to the top, and it makes no sense to run scams, because you will make more money in the long run by running an honest business.


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December 24, 2015, 10:41:36 PM
 #12

Is it safe to trade on OKCoin?

If you have small amount of bitcoin, then it is OK to trade there. The three big Chinese exchanges have good reputation.
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March 29, 2016, 04:38:51 PM
 #13

The fake volume is crazy..

Coindesk has been quite about it.. curious to if people have been bought.
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March 30, 2016, 08:33:55 AM
 #14

The fake volume is crazy..
Coindesk has been quite about it.. curious to if people have been bought.

Beyond a point, people stop worrying about volumes.
Even in regular markets, people post and cancel orders in quick succession, to mislead participants about market depth. The regulators are cracking down on that one though.

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April 01, 2016, 11:18:59 PM
 #15

The fake volume is crazy..
Coindesk has been quite about it.. curious to if people have been bought.

Beyond a point, people stop worrying about volumes.
Even in regular markets, people post and cancel orders in quick succession, to mislead participants about market depth. The regulators are cracking down on that one though.

Its time to run then.

The day people stop to look and ignore the volumes come and go out means people dont care. Or just plain dumb to ignore data infront of them.

If its being a questionable volume with these trading then it questions bitstamp itself on these to manipulate to their role to buy in at cheap when they please.
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April 13, 2016, 10:08:01 AM
 #16

Volume shouldn't be a factor when choosing an exchange, not only because it is often so unreliably reported.

What's much more important is the liquidity in the order book at the moment you want to do the trade - what's the bid-offer spread right now and how deep is the book, i.e. what will be the average price for your whole trade.

Then you can compare it with other exchanges.

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