Javier Pax published the report in question on August 26th, which disclosed that the actual numbers and those that had been reported by the crypto exchanges had a number of discrepancies.
One of the contributors at Forbes, Pax discovered that some of the small crypto exchanges had not reported their Bitcoin trading volumes accurately.
He discovered that their actual bitcoin trading volumes were really 95% less than the numbers reported, which is a huge discrepancy.
In comparison, some of the crypto exchanges that are not heavily regulated, such as Binance and Bybit, actually had trading volumes that were double the amount of what had been reported.
Pax went on to say that nearly 50% of all the crypto trading volume that exchanges had reported was most likely to be non-economic, or fake.
For instance, Pax disclosed that the global daily Bitcoin volume on June 14th this year had been around $128 billion across the crypto market.
However, this number was almost 51% of the total $262 billion bitcoin trading volume that had been reported on the same day by several sources.
According to Pax, these discrepancies in reporting data are a big concern and not to be taken lightly. This is because it is likely that these discrepancies do not just apply to bitcoin trading volumes.
It is highly likely that the trading volumes of the smallest crypto assets are also fabricated and this is a big concern.
It is a must to have accurate data when it comes to trading volume because this reflects the actual interest that people may have in a particular crypto asset.
This data is often used by investors for making important decisions, but now it is apparent that it can be manipulated.
It means that it can be used to convince investors that some assets have a greater demand than they actually do.
Not the first time
This is certainly not the first time that analysts have highlighted the inaccuracy in trading volume data associated with the crypto industry.
A report from Bitwise Asset Management had been published back in 2019, which claimed that 95% of the trading volumes that were reported by crypto exchanges were false, or were due to wash trading.
A report was also published earlier this year by Chainalysis, which highlighted that wash trading activities were on the rise.
According to the report from Chainalysis, these activities had become more prevalent in the non-fungible token (NFT) market.
But, it should be noted that most of the trades that had used this strategy did not generate any profits.
Wash trading refers to a trade where one person carries out both sides of the transaction in order to create a false image about the liquidity and value of an asset.
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