Over half of all Bitcoin trades are fraudulent, according to a recent report. This alarming statistic highlights the lack of regulation and transparency in the cryptocurrency market. The Bitwise Asset Management’s report to the US Securities and Exchange Commission (SEC) reveals that approximately 95% of Bitcoin trading volume reported on CoinMarketCap.com is artificial.
These fake trades are the result of ‘wash trading’ – a practice where sell and buy orders are simultaneously placed to create the illusion of market activity. This manipulation can inflate a cryptocurrency’s price and mislead investors. Despite this, the SEC has yet to take substantial action to regulate the industry.
The report also uncovers that only ten out of eighty-one exchanges analysed passed Bitwise’s test for real trading volume. These exchanges, including Binance and Bitfinex, account for nearly all genuine Bitcoin trading activity. The findings underscore the importance of investor vigilance and the need for improved transparency in the cryptocurrency market.
This revelation of widespread market manipulation could impact Bitcoin’s legitimacy and future growth. It also raises questions about the true liquidity of Bitcoin and other cryptocurrencies. With the increasing popularity of digital currencies, the need for regulatory oversight becomes more pressing.
Go to source article: https://www.forbes.com/sites/javierpaz/2022/08/26/more-than-half-of-all-bitcoin-trades-are-fake/?sh=a07290a6681f