We’ve seen a recent trend of insights and reports discussing the fake volume present across crypto markets. The crypto community understands this is a major issue slowing its legitimate acceptance into general society, and many businesses and entities are making an effort to uncover the truth of the dubious crypto market economy.
Bitwise Asset Management recently published their report of “The Real Bitcoin Market”, which discusses in detail the rampant fake trading volume across exchanges, and tries to uncover true market size of Bitcoin. The link can be found here.
In the study, Bitwise acknowledges the challenge of acquiring real trade data from crypto exchanges. In order to filter through the “gray markets”, Bitwise selected data from primarily regulated markets for its detailed analysis of the true Bitcoin market size.
Data from the following exchanges were used to obtain to spot market volume: Binance, Bitfinex, Bittrex, BitFlyer, BitStamp, Coinbase Pro, Gemini, itBit, Kraken, Poloniex.
Exchanges studied in Bitwise’ true Bitcoin volume analysis
Bitwise noted that the Blockchain Transparency Institute has also investigated non-economic and/or fake volume at length, and has identified 56 exchanges it suspects of having fake volume. None of the suspected exchanges are among the ten exchanges that Bitwise used in its study.
Furthermore, all the exchanges listed above aside from Binance are registered as Money Service Businesses (MSBs) with FinCEN (Financial Crimes Enforcement Network) and are obligated to establish formal Anti-Money Laundering (AML) policies to identify and file reports for suspicious and illegal financial activity.
Based on spot market data collected from CoinMarketCap.com and Kaiko.com, Bitwise noted actual Bitcoin trading volume was significantly lower than exchange-reported volume.
Of the $6 Billion in Bitcoin spot trading volume reported by exchanges, Bitwise found only $270 Million to be actual true volume, which suggests that around 4.5% of reported Bitcoin trading volume is actually real. Or in other words, over 95% of reported Bitcoin volume is fake! That makes for quite the effective headline when it comes to scaring outsiders from venturing into crypto.
They further support these results by comparing daily market turnover with gold, a similar but different asset (store of value). We can observe that Bitcoin’s market behavior follows that of gold relatively closely. If we were to increase the daily turnover to match that of Gold, we would obtain a global Bitcoin daily spot volume of around $380 Million, which could serve as a rough estimate if we factored in fake volume exchanges.
A few weeks ago, we released an article detailing how we achieved $250 million in executed crypto trades. Since then we haven’t stopped. In the last month, our monthly volume has increased by over 70%!
Based on the $270 Million in actual daily Bitcoin spot trading volume taken from the Bitwise report, we can extrapolate that Shrimpy is performing up to 1–2% of the entire Bitcoin spot market in trading volume!
However, we won’t go so far to make those claims as the numbers are just rough estimates. Even the Bitwise report mentions on several occasions that their report excludes a majority of crypto exchanges completely due to fake volume. While fake volume is a persistent problem in crypto, we cannot completely ignore ALL volume from these exchanges.
How is Shrimpy trading so much? The answer is simple. Our app is simple and easy to use. Unlike other automated trading bots, Shrimpy is beginner-friendly and doesn’t require trading knowledge or experience to set up. Users construct a simple crypto index portfolio by selecting their assets and appropriate allocations, and they’re set!
Why make it difficult for new crypto owners to manage their portfolio, especially in such a volatile and unpredictable market? By taking away the stress and need to actively manage crypto trades, Shrimpy gives crypto asset owners and traders piece of mind when it comes to managing their crypto future.
Shrimpy is on a bold mission to become the standard spot market trading solution for both basic and advanced traders. In our $250 Million milestone article, we mentioned our ambitious goal of integrating an additional 24 exchanges within the next year. However, we cannot just go to CoinMarketCap.com and start integrating exchanges based on trading volume. There must be a vetting process to identify which exchanges are not faking their volume. This ensures that any exchanges integrations that we support will be able to continue to drive Shrimpy’s momentum.
Shrimpy is an automated crypto trading & portfolio management tool that lets users automate their cryptoasset portfolio strategy like a traditional index fund.
Users are able to configure a custom cryptocurrency portfolio and implement a passive management strategy, removing the hassle of having to actively trade crypto.
The free version of Shrimpy includes complete automated trading, indexing and rebalancing features for ALL users. Shrimpy also offers a monthly premium subscription for $8.99/month. The premium subscription includes:
Shrimpy Social: Follow, communicate, and share strategies with other Shrimpy traders.
Shrimpy Insights: Learn how other Shrimpy users are constructing and managing their crypto portfolio.
Advanced Backtesting: An robust backtesting tool for evaluating custom cryptocurrency portfolio & strategies.
Beyond the consumer app, Shrimpy also offers a Trading API for developers looking to integrate scalable exchange trading functionality into their app.
Shrimpy’s Universal Exchange API was created as a cloud-based solution to address several crypto developer roadblocks including Exchange Trading, Product Scalability, and User Management. With Shrimpy’s API in hand, developers are not limited in scope when it comes to creating the next era of groundbreaking products that will shape the future of crypto.
Shrimpy’s API is a cryptocurrency trading API that is readily compatible with all of the following exchanges and their API endpoints: Binance API, CoinbasePro API, Bittrex API, Kraken API, Gemini API, Poloniex API, Huobi API, KuCoin API, Bibox API, BitMart API, and HitBTC API. Instead of having to manage all connections to every exchange, users can simply leverage Shrimpy’s existing crypto exchange trading infrastructure and focus on actual product development.
Originally published at blog.shrimpy.io.