High rates of fake volume are no surprise
Bitwise Asset Management analyzed trading activity at 81 exchanges over four days in March and found that the volume of trading is much lower than reported.
Of the roughly $6 billion in reported daily volume during four days in March, the firm calculated that about $273 million was legitimate.
The company undertook the study with an application to launch a Bitcoin ETF so it has a conflict of interest. However another recent study from Crypto Integrity said 88% of all activity in February had been inflated.
The WSJ first reported on the study:
"On regulated exchanges such as Coinbase, Gemini, BitFlyer and Poloniex, trading followed certain patterns, according to the Bitwise report. Trading volume, for example, rose and fell at predictable times coinciding with working and sleeping hours. Smaller trades were more frequent than larger ones, and many were in round numbers. All those patterns reflect how human traders think and act."
Volume numbers are often faked by exchanges trying to appear larger than they are in order to attract new clients. One highlighted in the study was CoinBene with $480 million in reported daily volume in the first week of March. That compares to $27 million at Coinbase.