In the framework of the 226 slides submitted to the Commission on securities and stock exchanges, we( @BitwiseInvest ) held the first of its kind analysis of data from all of the 81 exchanges, indicating that the amount of BTC >$1M on CoinMarketCap.
TLDR: 95% of the designated volume is fake, but there is good news!
Carefully, under the cut is a pack of images from the presentation.
- 95% of the reported volume of BTC is fake
- Probable motive — listing fees (maybe $1-3M)
- Real daily volume of ~$270M
- 10 from 81 exchanges provide real data
- Most of them(10) are governed by
And three links
- 1. Full presentation slides 226: t.co/DNw36VboPl
- 2. Review @paulvigna in the "Wall Street Journal": t.co/NI4XP3hYKK
- 3. Real daily trading volume BTC: www.bitcointradevolume.com
The daily total transaction volume is approximately $270M — 95% less than reported.
Only 10 exchanges have >$1M real daily trade turnover of BTC:
How can you tell what's real and what's fake?
There are two tests(described in detail in the presentation):
First: the real exchange have more trades with small amounts than with the large (with spikes on round numbers such as 1.0 BTC in the strength of behavioral preferences).
Unfair exchanges have clearly artificial histogram trading volume
Second test: At the exchanges surges in trading volume is almost perfectly symmetrical to each other, because they are part of the same market
On the fake exchanges charts in trading volume do not have such obvious similarities and do not correspond to the broader market. (More examples and detailed analysis on the website).
Excluding the fake data, the real volume of BTC is quite healthy, given its market capitalization.
The market capitalization of gold is ~ $7T with a volume of ~ $37B, which means a daily turnover of 0.53%.
The market capitalization of bitcoin of $70B means a daily turnover of 0.39%, which is quite similar to the figures of gold.
Time good news!
Arbitration between 10 real exchanges improved significantly. The deviation of the average price of any exchange of the total price now is less than 0.10%! Arbitration is significantly below the range given exchange fees (0.10-0.30%) and the cost of hedging
Here is the price deviation, broken for each of the 10 exchanges with the real volume. The deviation is very small, which is good
Here is another graph showing the range of prices among the 10 exchanges. There is one global, single price
More good news — 9 out of 10 exchanges with real volume are regulated by FinCEN as money service businesses and 5 out of 10 by the Department of financial services of the state of new York under the Regulations.
Also, 5 of the 10 exchanges have implemented surveillance tools to prevent market manipulation
And, not including the fake data volume futures CME and CBOE significant ($91M), especially compared with the real trading volume (35% of the monthly trading volume for February 2019).
This is good news because it means that a CME is regulated by, observable market— has a material dimension, which is important for foreign exchange-traded funds.
Summing up: the Market of bitcoins is less than reported, but more efficient and regulated, reducing the risk of problems around market manipulation.