Bitwise Tells US SEC That 95% of Volume Unregulated Crypto Exchanges is Suspect
“It’s [the spread is] $0.01. In the time this screenshot has been taken, bitcoin was trading at $3,419. Meaning bitcoin was trading at a 0.0003% spread, making it among the tightest lent spread of any financial instrument in the world. ”
“Beneath the hood the exchanges that record the greatest amounts are unrecognizable. The huge majority of this reported volume is fake and/or non-economic currency trading. ”
Bitwise asserts that approximately 95% of reported volume is fake and the real market for BTC is thus “significantly smaller, more orderly, and more regulated than commonly understood” — amounting in fact to $273 million.
Bitwise sources its information from the widely-cited crypto data tracker CoinMarketCap (CMC), which it claims includes a large amount of this defendant information, “thus giving a fundamentally mistaken belief ” of their real size of the Bitcoin market.
95 percent of volume on unregulated exchanges seems to be bogus or non-economic in temperament, an analysis from cryptocurrency index fund supplier Bitwise Asset Management has argued in a report dated March 20.
Suspect signals include an implausibly ideal alternating pattern of red and green trades, along with a lack of round variety or little value trades. On Coinbene, buy and sell orders also appear at timestamped pairs, together using a single offsetting another. In addition, the distributed on Coinbene at the right time of Bitwise’so investigation was 34.74: “which compares to $0.01 on Coinbase Pro. It’s surprising that a market claiming 18x more volume than Coinbase Pro might have a spread that is 3400x larger. ”Coinbase Pro reported around $27 million in daily traded volume of BTC at the right time of Bitwise’therefore investigation — as compared with $480 million reported by Coinbene. The latter is utilized by Bitwise to show the patterns typical of that which it qualifies as “suspicious exchanges. ”
Bitwise first analyzes regulated exchanges — using Coinbase Pro as a case study — to show the nature of the trading patterns it deems to be trusted.
Suspect exchanges also reportedly show consistent volume 24-hours a day, compared to regulated exchanges, where volume equates to sleeping and waking hours.
The analysis opens with the debate that while an earnings ~$6 billion at daily traded volume for Bitcoin is reported Throughout the area markets:
Bitwise’s record concludes its overall findings “show this ETF application [because of the Bitwise Bitcoin ETF Trust] matches equally ” of their SEC’s conditions for how a BTC ETF could meet the requirements of the Exchange Act.
As reported this week, new study from trading analytics platform The research suggested that almost 90% of crypto exchanges’ reported commerce volumes — of supported cryptocurrencies — were untrue.
The report further asserts that trading patterns on Coinbase Pro show “a greater-than-random variety of round trade dimensions,” which it qualifies as “more ordinary,” normally human behaviour. Bitwise also analyzes spread as a parameter, noting that:
Bitwise Tells US SEC That 95 Percent of Volume on Unregulated Crypto Exchanges is Suspect - April 2025
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