A report casts doubt on the legitimacy of the trading data on the biggest rivals of Bitcoin.
Japanese analyst and researcher Koji Higashi criticized cryptocurrency exchange houses for falsifying 99% of the trading volumes of the altcoins Ethereum (ETH), Litecoin (LTC) and EOS (EOS). Besides, he noted that the levels of false trading volumes presented by these exchange houses are significantly higher than those attributed to the Bitcoin market.
According to data presented in Higashi’s research published after an impressive price rally in the altcoin market, ETH increased by 20%, after falling to USD 116.25 at the end of December, whilst EOS and LTC grew by 26% and 25%, respectively.
However, Higashi believes that exchange house operators could be using false data on altcoin trading volumes before opening their bullish positions since trading volume remains one of the main indicators in this market.
“The trading volumes of the altcoins reported contribute to generating high expectations,” explains Higashi.
Bitcoin’s Dominance Greater than Reported
Higashi also specified that the reference volumes of the main altcoins included in his analysis were used concerning the fiat currencies presented on the CoinGecko portal, which specializes in analyzing the legitimacy of cryptocurrency exchanges, separating authentic data from false ones.
This strategy allowed Higashi to conclude that 95% of the total trading volume of Bitcoin reported is false. A comparison between the original cryptocurrency and the main 30 altcoins (not including stablecoins and exchange tokens) revealed even more problems regarding altcoin data.
According to Higashi, the net trading volume of the main digital currency averaged 10,000 BTC (equivalent to about USD 70 million), whilst the reported volume was approximately 2,600,000 BTC (equivalent to about USD 18,000 million). This suggests that 97% of the reported data may be considered false.
“If false trading volumes are eliminated, then Bitcoin’s dominance in the market increases to 70%, compared to the 50% reported,” says Higashi.
Dominance of the Chinese Republic
Higashi’s stablecoin analysis also revealed China’s surprising dominance in the trade of Bitcoin. He said that the Asian giant makes more than half of the cryptocurrency transactions against fiat using the controversial stablecoin USDT.
“False volumes are a serious problem for the crypto industry,” said the Japanese analyst.
An article by Higashi published on the website Medium concludes that the United States controls only 20% of the Bitcoin market, followed by Japan and Europe with a market share of 10% and 5%, respectively.
It should be noted that US regulators adopt a cautious approach to regulate digital currencies. The United States Securities and Exchange Commission (SEC) has so far emphasized that there are too many cases of price manipulation in the global cryptocurrency market, which has become the main reason for the refusal to approve Bitcoin exchange-traded funds (ETF).
The fact that the cryptocurrency exchange houses analyzed by Higashi reported false Bitcoin and altcoin data should serve to raise awareness among those wanting to venture into the crypto world. This Japanese analyst has provided valuable information that proves, once again, that the cryptocurrency par excellence remains the best investment option.
By Alexander Salazar