Bitcoin is the world’s most popular cryptocurrency and also the world’s most manipulated cryptocurrency. As of 2022, bitcoin represents 40% of the total crypto assets outstanding in the new and volatile crypto markets. Now,  new research just exposed the illegal bitcoin trading activities taking place on various crypto exchanges.

According to a recent analysis by BanklessTimees, more than 51% of the total Bitcoin trading volume on various crypto exchanges is fake. The vast majority of this fake volume is due to what is known as wash trading in which a large portion of bitcoin is bought and sold simultaneously on the same crypto exchange platform by the same person or group of people colluding together to generate misleading market information and create false liquidity.

Commenting on the report, BanklessTimes CEO, Jonathan Merry, said, “It’s difficult to talk about cryptocurrency without talking about Bitcoin. Yet, there is a concern that a large part of the daily traded volume of Bitcoin is fake. This puts into question the legitimacy of exchanges and the reliability of data.”

Wash trading is not the only factor. Another factor contributing to the fake volume is stablecoins such as Tether (USDT) which is supposed to be pegged to the US dollar. Tether pairs very well with Bitcoin and is often used to buy and sell Bitcoin on exchanges. This results in many volumes being generated without any actual Bitcoin changing hands.

Why do bitcoin investors make up their trading volumes?

So why inflate the trading volumes? BanklessTimes found that faking trading volume can be a way for exchanges to attract new customers. By appearing to be more popular than they actually are, exchanges can trick investors into thinking there is more activity and liquidity on their platform.

The author warns that investors should be wary of exchanges that report false figures. You must do your research and only use exchanges you trust.

You can read more about the report here.