Nearly all of bitcoin’s $6 billion reported average daily trading volume is fake, according to an analysis made public today by Bitwise, which concluded that bitcoin markets are far smaller, more efficient and more U.S.-centric than previously known. Bitwise presented the findings to the SEC this week as part of its bid for regulators to approve its proposal for the first bitcoin exchange-traded fund.
In Bitwise’s list of exchanges with real volume, Binance tops the list with around $100 million worth of bitcoin changing hands daily. Coinbase ranks second with around $28 million. Six of the 10 exchanges with real volume are based in the U.S., according to the report—a far different picture of the market than what is available on CoinMarketCap, the industry’s most commonly cited data source. Many of the exchanges listed on CoinMarketCap have little to no real-world footprint, while those on Bitwise’s list tend to have raised venture capital and employ dozens or hundreds of people.
The report could be a huge boon for the approval of investment products tied to the price of bitcoin. Regulators have been hesitant to approve a bitcoin ETF in part because information about the cryptocurrency’s price is unreliable and varies widely across exchanges. Bitwise’s report, however, shows that across a handful of trustworthy exchanges, bitcoin prices rarely deviate significantly from the market.