Commercial statistics from Crypto Exchange Wash show a worrying picture
Commercial statistics from Crypto Exchange Wash show a worrying picture
It is no secret that Wash Trading continues to plague the cryptom market. A paper published by the National Bureau of Economic Research (NBER) entitled "Crypto Wash Trading" found that an overwhelming number of unregulated crypto exchanges are a considerable part of the WASH trading.
The non -profit research organization examined 29 large stock exchanges such as Binance, Coinbase and Huobi as well as less well -known stock exchanges from July 9 to November 3, 2019.
wash the trade with crypto
Based on the rank of third-party websites, representativity and API compatibility, the crypto exchanges in Tier-1 (among the top 700 in the area of finance/investments by Similarweb) and Tier-2 (all classified outside the top 960) were classified) The trade with crypto assets such as Bitcoin, Ethereum and XRP was examined.
The authors pursued several approaches to recognize cases of wash trading that are probably not influenced by "strategies of distributed dealers, stock exchange features or special features of the investment class.
It was found that Wash Trades made up to 77.5 % of the total trading volume on non -regulated stock exchanges, with a median of 79.1 %. In the meantime, it was observed that Wash-Trades make up more than 80 % of the total trade volume on the twelve animal 2 exchanges, "which is still over 70 % after taking the observable stock exchange heterogeneity".
The paper was:
"Our first important result is that the wash trade is widespread on non-regulated stock exchanges, but did not on regulated stock exchanges," they wrote. "We only find anomal trade patterns on unregulated stock exchanges, with animal 1 exchanges failing in more than 20 % of the tests and falling through animal 2 exchanges with more than 60 %."
worrying numbers
The study found that the Wash trade in crypto exchanges correlated positively with the prices of crypto-assets at short notice.
In addition, Wash trades appear less on platforms with "longer founding stories and larger user bases". In contrast, less popular exchanges have short-term incentives for Wash trading without being subject to a precise examination.
"While current business incentives and ranking systems fuel the rampant Wash trading on unregulated stock exchanges, the regulated stock exchanges that have spent considerable resources for compliance with regulations and the license and are confronted with strict punishments for market manipulation."
In the first quarter of 2020 alone, the Nebr study recorded a whopping 4.5 organic.
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