Bitcoin may not be as popular as advertised, according to a new study.
More than half of the reported trading volume on 157 crypto exchange sites is misrepresented or fake, according to a study published in Forbes magazine.
“Forbes estimates the global daily bitcoin volume for the industry was $128 billion on June 14. That is 51% less than the $262 billion one would get by taking the sum of self-reported volume from multiple sources,” the study reads.
The study says the biggest problems come from a lack of regulation, pointing out that the least regulated exchanges account for $89 billion of bitcoin volume while claiming to make $217 billion.
Experts point to wash trading, the act of selling an asset to yourself in an attempt to inflate the value of that asset, as the culprit for the discrepancy in value.
Cryptocurrency has come under fire for rampant wash trading before. NFT tracking site Cryptoslam found in April that 95% of transactions on the NFT trading platform LooksRare were wash traded.
SEE ALSO: Morgan Stanley pays a $35M fine for exposing the data of millions of customers
“In some cases trading bots execute these wash trades in tokens, increasing volume, while at the same time insiders reinforce the activity with bullish remarks, driving up the price in what is effectively a pump and dump scheme,” Forbes wrote.
The less than transparent nature of cryptocurrency exchanges casts more doubt on the stability of the new financial market. Bitcoin, the most well-known and widely traded cryptocurrency, suffered a major crash in value this year. One year ago today, one bitcoin was worth more than $43,000. The price has plunged to just over $18,000.
Still, despite concerns about stability and lack of transparency, about 573 million people visit cryptocurrency exchange sites each month, the report found.