Bitwise Asset Management, an investment company in San Francisco cryptography technologies, has asked the SEC for a Bitcoin ETF. In anticipation of their candidacy, they conducted a study of 80 exchanges, mostly unregulated. Their findings are worse than most: they found that nearly 95% of all unregulated trade reports false volumes. As such, their ETF will only be based on the 5% legitimate.
The findings of the Bitcoin arbitrage app are worse than most reports to date. Earlier this week, we reported TIE findings that about 75% of transactions were fraudulent.
The outlook for an ETF looks bleak, with more and more unregulated trade coming online, competing for a much smaller market than we generally think. Several studies have concluded that most exchanges report false volumes. When they do not openly report fake transactions, many stock exchanges engage in internal transactions, sometimes increasing the price of assets that would otherwise not see any demand. The most notable case of this situation is, of course, Bithumb which, despite significant volumes recently reported, has announced serious layoffs.
More cryptos = higher volume
There is every reason to believe that unregulated trade will have a larger volume because their lists are broader. The more markets you have, the more volume you will have. Coinbase has far fewer ads than most altcoin stock exchanges, which could explain why, although it is one of the most recognizable brands in encrypted trading, its declared volume is lower than many others. trades. But some sites that receive very little traffic report a high astronomical volume.
According to Bitwise, current business models make no sense. A constant volume of transactions will occur throughout the 24-hour period and transactions will be placed to neutralize each other. Human traders are much less predictable than that, and even using robots, some variation is expected based on inputs. However, transactions in places such as Coinbase will be compatible with human work hours and rounded transactions are common.
With all this false volume circulating, the real value of cryptocurrencies as a whole risk being questioned. Can we really claim that the demand is $ 100 billion if the majority of reported transactions never occur?
The inconvenient truth is that the cryptography market might not be ready for an exchange-traded fund, as bad as some would like it to be. Unlike ordinary securities, the global regulation of cryptocurrencies is ubiquitous, with some jurisdictions having full bans and others with advanced executives.