Bitwise Argues Bitcoin Trading Volumes, Amid ETF Filing To The US SEC

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In a report from Bitwise, Bitcoin US-traded volumes are much higher than expected

The United States is responsible for 29-percent of the global Bitcoin trading volumes, according to a report from Bitwise Asset Management.

The company also rang a bell of disbelief in some of the data, derived from exchanges, informally accusing them of inflating volumes in order to get new customers.

In the Bitwise report, the US is second by daily Bitcoin trading volumes, and the first place goes to Malta, where the regulation protocols are still somewhat free. US trading is followed by Taiwan, the United Kingdom, and Japan.

Bitwise is yet another company to try approval for an ETF by the US SEC. While other companies were making attempts to prove to the SEC that crypto manipulation isn’t a significant issue, Bitwise is taking another route to demonstrate why an ETF is a good idea. In the paper, Bitwise emphasizes on data manipulation from the exchanges, which creates an unhealthy environment for cryptocurrencies and Bitcoin in particular.

One of the companies pinned down by Bitwise is CoinMarketCap. Bitwise notes that “although the use of Bitcoin trading volumes has become a measure of their strength, the data isn’t real and 95% of the data contains non-economic volumes”.

Bitwise estimates that from the $6 billion/day trading volumes for Bitcoin, the actual economic trading is no more than $273 million. The main reason for that, at least in the report to the SEC, is that the biggest Bitcoin players prefer to use over-the-counter (OTC) exchanges, which take transactions off the platforms themselves. The second reason, Bitwise believes, is the “prestige” factor — how much trading is happening in a given exchange. This move is often used to lure-in ICOs in their listing phase, and the fees may go up to several million dollars.

Bitwise examined 81 exchanges and found only 10 with “natural patterns” of trading volume history — Binance, Kraken, Bitstamp, BitFinex, Coinbase, Gemini, itBit, bitFlyer, Poloniex, and Bittrex. Others have “suspicious trading activities and manipulated volumes”.

It is unclear if the SEC will approve the report and give a “green light” for a Bitcoin ETF by Bitwise. But the data may help to strengthen the crypto community.

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