The basis for this overview is primarily derived from the recent Bitwise
presentation for the United States Securities and Exchange Commission in which the firm addressed several of the oft-cited concerns of the commission in regards to approval of a Bitcoin ETF. The concerns include – but are not limited to – fake volume, market manipulation, custody solutions, valuation and market efficiency.
Biggest spot exchanges
The Bitwise report suggests that the real market for Bitcoin is smaller, more efficient and more regulated than commonly presented, especially when excluding exchanges with noticeably inflated or fake volumes and wash trades. Bitwise asserts that upwards of 95% of the Bitcoin trading volume is fake or non-economic. Therefore, the argument goes that the actual Bitcoin market is smaller, more efficientand more regulated than perceived. The reported volume of the Bitcoin market averages about $6 billion daily, where BTC trades against fiat or fiat-pegged stable coins, however much of this is fake volumes or wash trading. Using three metrics for analysis which include trade size distribution, volume distribution, and spreads, Bitwise found just ten exchanges have 'real' volume out of a total of 81 exchanges with reported volumes above $1m.