WASH TRADING: Entire Tether supply was traded 5 times yesterday

Crypto analyst Mati Greenspan has called out CoinMarketCap over its frankly unbelievable cryptocurrency trading figures in the past 24 hours.

Greenspan – founder of Quantum Economics – has called attention to the astonishing levels of wash trading going on with major cryptocurrencies.

Earlier today he tweeted: I think this wash trading thing is getting a bit out of hand @CoinMarketCap.

Reported 24-hour volume of Tether is nearly 5 times the total market cap.

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If we believe these numbers, 30% of all BCH in circulation has traded today, 66% of all EOS, and 93% of all Litecoin.

He included a screenshot showing that in 24 hours, $19.341 billion worth of USDT (Tether) was traded according to CMCs figures.

Thats around 470% of the total supply of USDT in existence.

I think this wash trading thing is getting a bit out of hand @CoinMarketCap.

Reported 24-hour volume of Tether is nearly 5 times the total market cap.

If we believe these numbers, 30% of all BCH in circulation has traded today, 66% of all EOS, and 93% of all Litecoin. pic.twitter.com/BbpQIYGjg2

— Mati Greenspan [not trading advice] (@MatiGreenspan) December 2, 2019

By contrast, just 13% of the total Bitcoin supply changed hands – and research shows thats likely to a large exaggeration in any case.

Rival site Messari which Greenspan says he uses religiously has its own real volume 24 hour figure. It suggests that in the past 24 hours, around $542 million USDT was actually traded.

If true that means the real USDT volume is just 2.8% of Coinmarketcaps figures.

Listen to Mickys interview with Mati Greenspan on the debut episode of our new podcast Blockchain Journeys. Also available on Castbox and Pippa

Coinmarketcap already has a solution

CMC is well aware of the issue of wash trading – which is where one entity trades with itself to artificially inflate volumes.

Research suggests that around three-quarters of cryptocurrency exchanges fake the vast majority of their volume.

Exchanges fake volumes to rise up the CMC rankings, which gets them attention and attracts real users and allows them to charge higher listing fees.

CMC intends to combat wash trading by ranking exchanges on a new metric called liquidity rather than volume.

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