Slashdot Mirror
Most Bitcoin Trading Faked by Unregulated Exchanges, Study Finds (wsj.com)
Up to 95% of all reported trading in bitcoin is artificially created by unregulated exchanges, according to a new study [PDF], raising fresh doubts about the nascent market following a steep decline in prices over the past year. From a report: Fraudulent trading volume has dogged cryptocurrency trading for years, but the extent of the market manipulation has been difficult to determine. Bitwise Asset Management said its analysis of trading activity at 81 exchanges over four days in March indicates that the actual market for bitcoin is far smaller than previously thought. The San Francisco-based company submitted its research to the U.S. Securities and Exchange Commission with an application to launch a bitcoin-based exchange-traded fund.
The study, made public Thursday, is an attempt to alleviate the agency's longstanding concerns that a bitcoin ETF would leave investors exposed to fraud and market manipulation. Bitwise's fund, if approved, would be based upon the 5% of trading it considers legitimate, said Matthew Hougan, Bitwise's head of global research. That volume comes from 10 regulated exchanges that can verify that their trading data and customers are real. This slice of the market, he said, is well regulated, transparent and efficient. "I hope everyone sees there is a real market for bitcoin," he said.
The study, made public Thursday, is an attempt to alleviate the agency's longstanding concerns that a bitcoin ETF would leave investors exposed to fraud and market manipulation. Bitwise's fund, if approved, would be based upon the 5% of trading it considers legitimate, said Matthew Hougan, Bitwise's head of global research. That volume comes from 10 regulated exchanges that can verify that their trading data and customers are real. This slice of the market, he said, is well regulated, transparent and efficient. "I hope everyone sees there is a real market for bitcoin," he said.
How can you have real trading of a fake currency?
Bitcoin clearly has all the attention needed to become a MAJOR investment target for SMART investors. Obviously SLashdot.Org backs it or else they wont talk about it so much, and now with major companies like IBM and Microsoft and Apple on bord it is an UNBEATABLE investment. People need to get in EARLY or else be at major risk of LOSING OUT. I am a top 500 investment advisor at a major firm and I tell all my clients to sell there bad performing fiat currency and things like gold and other risky investments and instead push everything they have into Bitcoin because it is the absolute FUTURE of everything. All of them have come back and given me prase for being so forward looking and brilliant, but now I want to make sure this information is put out there so others can get the benefits of the AMAZING investment that is Bitcoin!