In mid-September, the Blockchain Transparency Institute (BTI) published its current market surveillance report, examining various crypto exchanges. According to the study, the well-known Kraken and Coinbase exchanges are among the "cleanest" crypto exchanges in the world, especially when dealing with so-called wash trading. In the past, the work of the Blockchain Transparency Institute had the result that many wash trading accounts on crypto exchanges were deleted.
Table of contents
- Detection and deletion of wash trading accounts
- Crypto exchanges work with BTI
- Regulation does not necessarily protect against wash trading
- Price drop for Bitcoin
- Price falls below support lines
- Conclusion: Crypto exchanges take action against wash trading
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Detect and delete wash trading accounts
The institute closed on September 19 its fifth market surveillance report and recommends the two crypto exchanges mentioned. In the past six months, the institute has primarily set itself the task of finding wash trading accounts at well-known crypto exchanges. This controversial method helps to artificially increase the trading volume of a crypto exchange.
In a wash trade, an investor buys and sells a certain trading instrument at the same time. The goal is often to show that a trading instrument is more popular than it actually is. However, tax reasons can also be the cause of wash trades. In Germany, wash trades are considered a form of market manipulation and have been banned throughout the EU since 2016.
Crypto exchanges work with BTI
According to the BTI, many exchanges have been working with the BTI for six months Institute together. The number of wash trading accounts could be significantly reduced. Since the beginning of 2019, the share of wash trading in the world's 40 leading crypto exchanges has dropped by 35.7 percent. Data reports have been shared with many exchanges, which have improved their mechanisms. As a result, many wash trading accounts were recognized and deleted. In addition to octopuses and coinbase, Poloniex and Upbit also performed well. Bibox and OKEx, on the other hand, currently have the highest proportion of wash trading volume with more than 75 percent.
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Bitcoin Price Action Marred By Confusion
Regulation does not necessarily protect against wash Trading
The BTI's market surveillance report shows that the cleanest crypto exchanges are based in the United States and Japan. The controls of the responsible authorities are stronger there. However, the BTI says that legal framework conditions do not always lead to clean trade. In South Korea, for example, the regulatory requirements are very tight. Nevertheless, the cryptocurrencies Dash and Monero in particular were traded heavily via wash trading on the crypto exchange Bithumb in 2019. According to the BTI, more than 90 percent of the trading volume there is due to wash trading.
At Gemini, Bitflyer and Indodax, the share of wash trading is less than ten percent. Binance improved significantly over the course of the year. There, the wash trading share was almost 20 percent at the beginning of the year, but could be reduced to less than ten percent by September. If a crypto exchange has a wash trading share of less than ten percent, cooperation with the BTI is possible to make the platform even more secure.
Price drop for Bitcoin
On many of the crypto exchanges mentioned, Bitcoin is still the most traded cryptocurrency. This was again very volatile this week, losing $ 1,000. As early as June, investors were happy about a high of $ 14,000, now the cryptocurrency has to accept high losses again. On Wednesday, a bitcoin was worth just over $ 8,000 on some exchanges, dropping to its lowest level since June. The day before, a Bitcoin was worth over $ 9,500. A precise reason for the recent price decline is not known.
Recently, some signals have already indicated that prices are falling. The Bitcoin price recently fell below the moving average of the past 20 weeks. Important support levels were not met. The moving average is an important indicator for a bull market, i.e. rising prices. In addition, the trading volume fell recently and the new Bitcoin futures on the new Bakkt stock exchange started off weakly. Furthermore, according to the website Blockchain.com, the hash rate, the unit of measurement for computing power at Bitcoin, fell by almost 30 percent. As the mood already indicated falling prices, the message about the hash rate also came into play.
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Price fell below support lines
Last the triangle pattern chart could also no longer support and the price fell below this value. After the price drop of $ 1,000, the Bitcoin price initially leveled off at around the moving average of the past 200 days. However, it is questionable how long this support will last. Many indicators and the mood on the market are currently pointing to falling prices, which is not unusual after such a price drop.
The last few days have not only looked bad for Bitcoin. The entire crypto market suffered a setback. Some altcoins lost even more than bitcoin. Bitcoin Cash and Litecoin also weakened. The stablecoin tether benefited from this and was ranked fourth in the cryptocurrencies market cap. At Tether, prices also rose by around one percent. However, the peg to the dollar is weakening.
Conclusion: crypto exchanges take action against wash trading
The Blockchain Transparency Institute (BTI) published its fifth market surveillance report on several crypto exchanges a few days ago, Since the beginning of the year, the focus of the institute has been on finding accounts that operate wash trading. According to the latest study, octopuses and coinbase do particularly well. The work of the BTI has resulted in many wash trading accounts being found and deleted in the past few months.
Crypto exchanges with less than ten percent wash trading accounts can work with the BTI to further increase the security of your exchange. Since the beginning of the year, the number of wash trading accounts on the 40 most important crypto exchanges has dropped by 37.5 percent. The market surveillance report shows that exchanges in the USA in particular are very safe. In addition, it becomes clear that strict regulations such as those in South Korea do not necessarily mean that exchanges are free of wash trading.
Meanwhile, Bitcoin had to accept high losses this week. Bitcoin prices dropped $ 1,000, the lowest since the June high. The reasons for this are unclear, but some chart-technical indicators have already shown that the mood of investors rather indicated falling prices. Among other things, the price fell below important support lines, the hash rate fell and the trading volume declined. In addition to Bitcoin, other cryptocurrencies also lost significantly. As a result, the entire crypto market had to cope with a setback and many cryptocurrencies were once again volatile.
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