According to Forbes' most recent analysis of 157 exchanges, the trading volume of bitcoin is substantially lower than what is stated. Bitcoin's liquidity is measured against USDT from Tether or the US currency. Therefore, is Bitcoin trading volume always real?
In contrast to the $262 billion reported by all exchanges, the volume of Bitcoin traded on June 14 was $128 billion, according to Forbes. This demonstrates that almost 51% of all Bitcoin trading was fraudulent or unrelated to commerce.
What Tether Does
Forbes claims that because stablecoins account for the majority of Spot Bitcoin trading, Tether has a big impact on such transactions. However, a sizable portion of trades also involve fiat money, such as the US dollar, the Japanese yen, and the South Korean won.
Overall, the USDT stablecoin or the US dollar account for roughly 90% of Bitcoin's liquidity. Additionally, there is a sizable non-dollar demand coming from Turkey, Europe, Japan, and South Korea.
Additionally, it found that spot trading and futures trading are the next most popular forms of Bitcoin trading after everlasting trading.
Bitcoin Trading Volume on the Top Exchanges: Binance, FTX, and OKX
Based on the discrepancies between exchanges' self-reported volume and their real volume, the research divided exchanges into three categories.
The top three exchanges by trading volume, according to the research, are Binance, FTX, and OKX. Bybit, Bitget, MEXC Global, KuCoin, BingX, Crypto.com, and Huobi Global are further examples.
In Group 1, which includes exchanges with discrepancies of 0 to 25% between their actual trading volume and reported Bitcoin trading activity, only FTX, OKX, and Crypto.com are noteworthy. The remaining exchanges belong to Group 2, which includes those with a volume discount between 26 and 79%.
Most of the exchanges in Group 3 are small and unregulated, and several of them made claims about plainly fictitious Bitcoin trading activity. For instance, BitCoke announced a trading volume of $14 billion despite receiving less than 10,000 visitors each month, of which more than 50% were from Argentina.
Uncertainty in the data from exchanges with little regulatory oversight
The survey noted that exchanges that run with little regulatory control, which affects the reliability of their numbers, are one of the main issues with false or non-economic trading activity.
The actual trading volume for these exchanges, which prominently include Binance, Bybit, and MEXC Global, was $89 billion despite them reporting a $217 billion volume.
Why Do These Exchanges Report Inaccurate Data?
In order to create a false impression of demand and the increasing popularity of their tokens, some traders, according to the Forbes study, engage in wash trading.
According to the paper, these non-economic tradings let exchanges appear to have greater activity than they actually do, which may encourage more legitimate trading.
