SEC Accepting Public Comments to Decide the Future of ETF Backed by Bitcoin and T-Bills

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SEC Accepting Public Comments to Decide the Future of ETF Backed by Bitcoin and T-Bills
The proposed rule change will allow Wilshire Phoenix Fund to list shares of ETF on NYSE Arca. SEC has declared that the public can comment on the aforementioned matter within 21 days’ time period.
SEC Accepting Public Comments to Decide the Future of ETF Backed by Bitcoin and T-Bills

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Source: CoinSpeaker

Bitwise Report 2.0: HitBTC, Huobi, and OKEx skirt the line between fake and real volume

Cryptocurrency exchanges have been under the microscope for several months, with the upswing in Bitcoin’s [BTC] price contributing to certain platforms fudging their numbers. Several reports and research pieces have surfaced, classifying exchanges between those having “real” and “fake” volumes.
The most prominent report was issued by Bitwise Asset Management, which strictly stated that only 10 exchanges had “real” volume, while the other 95 percent were fake. However, in a recent report, the Bitcoin ETF hopefuls have highlighted three exchanges that have “fake volume with possible real-world footprints”.
According to Bitwise, the exchanges that skirt the defined lines between the “real” and the “fake” were HitBTC, Huobi, and OKEx.
The firm’s March report addressed to the US Securities and Exchange Commission highlighted 10 exchanges with real volume. However, following public requests, the firm in a subsequent report highlighted three exchanges with “meaning volume”.
Firstly, the report analyzed the trade volume percentage on an exchange, depending on a specific trade size over a defined period. Citing this trade size histogram for OKEx, the report stated that the same is “notably suspicious,” as it had no absolute spikes and an “atypical rise” in volume from 1-6 BTC. The exchange’s trade distribution also showed an “unusual” tail from 6 Bitcoins.
In terms of volume spikes from 28 April to 5 May, the graph depicted constant hourly volume which according to Bitwise, “betrays none of the natural rhythms of the reference exchanges.” The “reference exchanges,” are the 10 exchanges that Bitwise has contended as having “real volume.”
On the topic of OKEx’s trade volume, the report quite clearly spelled,
“While there may be a smattering of real bitcoin volume on OKEx, the charts are clear: the vast majority of bitcoin volume here is entirely fake.”
Source: Bitwise
HitBTC, which is rumored to be in liquidation woes, was also labeled as having “entirely fake” volume. The trade size histogram showed an “eerily flat line,” posting no volume after 0.5 BTC. The exchange’s hourly volume shows complete disparity with the reference exchanges, with most volume activity concentrated between April 29-30.
Bitwise added that market events which affected the volume of the “real” exchanges did not impact HitBTC and hence, the report read,
“We believe HitBTC’s volume is predominantly wash trading, done in small trade sizes.”
Source: Bitwise
Huobi’s trading and volume pattern according to the study, was the “trickiest,” Bitwise stated. Prior to their March study being released, the Trade Size Histogram showed a “highly anomalous pattern.” The chart shows an increase in trade volume between 5-11 BTC, where “very little trade volume occurs.”
Prior to the release of the Bitwise report, from 3 March to 21 March, the exchange’s Trade Size Histogram showed a “consistent pattern,” which “completely disappeared within three weeks.” The report contends that those, at Huobi, engaged in “wash trading,” cleaned up their act to temporarily portray a change in trades to avoid “detection.”
The report cautioned,
“We also recognize that Huobi might have taken action to clean up wash trading on their platform within that time frame, but that view is challenged by the fact that Huobi’s reported bitcoin trade volume did not meaningfully drop during that time.”
Source: Bitwise
Several reports have also supported Bitwise’s claims that the three exchanges fake their volume, although not completely. The report cited studies from the Blockchain Transparency Institute, The Tie and Sylvain Ribes. Compiling a simple weighted average of the estimates by the aforementioned reports, Bitwise concluded that the “estimated real volume” of HitBTC, Huobi and OKEx were,
Source: Bitwise
To put these numbers in perspective, according to CoinMarketCap, HitBTC, Huobi Global and OKEx had $1.63 billion, $1.97 billion and $2.57 billion, respectively, in reported trade volume over the past 24 hours.
The post Bitwise Report 2.0: HitBTC, Huobi, and OKEx skirt the line between fake and real volume appeared first on AMBCrypto.
Source: AMB Crypto

Bitwise Crypto Index Committee Bans Bitfinex as a Price Source

Following the case against Tether and Bitfinex by the New York Attorney General, The Bitwise Crypto Index Committee after a meeting held on 25 April, 2019 has decided to ban Bitfinex from contributing price indices as a price source. This is to take effect immediately.
Rule “III.A.ii.b” meeting
On 25 April 2019, the Bitwise Crypto Index Committee held a meeting in accordance with Index Rule “III.A.ii.b” with respect to the New York Attorney General’s claims toward Tether and Bitfinex. the meeting which was chaired by Matt Hougan. According to a notice of the meeting published on Bitwise website, the New York Attorney General has retained a court order against iFinex Inc., the owner of the Bitfinex exchange and Tether, the company that issues USDT based on the allegations of fraudulent activities involving $850 million.
The meeting ended with a 100% vote against Bitfinex and the company was banned from contributing price indices based on the following conditions which Bitfinex did not meet. The condition is that a company that can contribute such information:
“Is in compliance with local regulations and not subject to extraordinary regulatory or legal action.”
The committee says “This requirement exists to limit exchanges to those that are positive actors in the community, and to limit the potential for interruptions in service or unusual pricing due to the government or regulatory enforcement actions.”
Implications on price discovery
To clear the air, the committee said the ban will not affect price discovery significantly, neither will it affect access to liquidity and the ban is more of a step towards caution. What effect is this likely to have on Bitfinex exchange and its IEO platform Tokinex token LEO?
The post Bitwise Crypto Index Committee Bans Bitfinex as a Price Source appeared first on Coingape.
Source: CoinGape

Bitwise Report 2.0: Bitcoin [BTC] futures continues growth; volume over 50% of its Spot counterpart

Amidst the price rally fever that is gripping the Bitcoin [BTC] spot market, contractual products are continuing to surge. A new report by Bitwise Asset Management, continuing from where their March report left off, attests to the growth of the Futures market, in consequence of the April rally.
On a month-on-month basis, Bitcoin Futures saw a massive bump in April trading at an average of 10,000 contracts daily, peaking on April 4, with over 22,000 contracts traded. To put that number in perspective, in March 2019, the average contracts traded was less than 4,000. Despite the high standards set in April, the average daily contracts traded in May, with 25 days gone has exceeded 14,000 and still looks to grow, given the price performance of Bitcoin.
Source: Bitwise
Bitwise also contends the “critical importance,” of the “size” of the BTC futures market, as it is a key factor in the evaluation of the Bitcoin ETF, for which Bitwise is one of two key applicants.
Another key finding of the report, referencing their earlier report detailed the value of Bitcoin futures market to their spot equivalent in terms of “real volume.” The BTC futures market, in April, accounted for 48 percent of the spot market, in terms of “real” volume, and 2.43 percent when the “reported” volume was analyzed. The March report highlighted the futures market to be one-third of its “real “spot equivalent, hence there was a considerable jump to 48 percent noted.
Bitwise also tabled the BTC futures market against their spot competitors based on the individual average daily volumes [ADV] of the exchanges, for the month of April, in each category. On the basis of this assortment, the CME would take the top spot with $257.79 million ADV or 31.35 percent, followed by Binance, $217.6 million ADV or 26.46 percent and Bitfinex $78.16 million ADV or 9.5 percent. CBOE is the only other futures competitor at the 10th spot with $9.86 million ADV or 1.19 percent.

Furthermore, the report charted the “regulated” Bitcoin as a percentage of real Bitcoin spot volume on a month-on-month basis and saw a considerable spike in the past two months, as the price surged. Notably, for the first time since derivative products were launched in December 2017, the Futures market amassed over 50 percent in proportion to the spot market, in May 2018.
Back in March, when the first report was released, the Futures market was less than one-third of their competitor’s value, and grew substantially to over 45 percent in April as prices surged and Wall Street moved on their XBT. With CME, Grayscale and even the phasing-out CBOE seeing their volumes rise, the April push was compounded in May and the proportion rose above the half-way mark.
Source: Bitwise
The SEC previously mentioned that one of the key factors behind the ETF approval was the performance of the BTC Futures market and its reaction to the Spot counterpart trading. Addressing this “requirement”, Bitwise concluded:
“The bitcoin futures market would clearly not satisfy that requirement if the bitcoin spot market were really trading $11 billion per day, but our new understanding of the true size of the bitcoin spot market reshapes this discussion considerably.”
The post Bitwise Report 2.0: Bitcoin [BTC] futures continues growth; volume over 50% of its Spot counterpart appeared first on AMBCrypto.
Source: AMB Crypto

CoinGecko’s “Trust Score” to combat fake trading volume; will inject liquidity using online traffic and order-book data

In the wake of several cryptocurrency exchanges misreporting a lot of metrics, market data aggregator, CoinGecko, has decided to take a stand against this fudging of numbers.
Announced on May 13, CoinGecko’s “Trust Score” will move from relying on exchange’s reported trading volume to a more wholesome approach including the likes of web traffic and order-book data. Bobby Ong, Co-founder of the crypto-market aggregator, stated in a post that the “Trust Score” will aim to “combat fake exchange volume data.”
The post cited several exchanges reporting high liquidity owing to the simple, back and forth movement of funds to inflate their reported figures. The update will be included in their “Exchange Overview and Coin pages,” added Ong.
Web traffic data obtained by SimilarWeb will be used as it is “much more difficult to fake web traffic statistics aggregated by 3rd party services.” Order-book analysis will be carried out via two new metrics, the Bid/Ask Spread and the +/-2% Depth Cost, which is based on the USD capital required to move the order book by 2% in either direction.
On the basis of this calculation, the post stated,
“With “Trust Score” in action, the list of top exchanges changes dramatically as the algorithm prioritizes exchanges with tight spread and deep depth, rather than purely by volume. This makes trading volume manipulation much less attractive to exchanges, and puts the focus back onto what matters to the traders – liquidity.”
It should be noted that the Average Daily User Trading Volume [ADUTV] will be calculated based on the median of 10 exchanges, based on Bitwise Asset Management’s report presented to the SEC. The report stated that over 95% of exchanges fake their volume, with the exception of ten exchanges, which CoinGecko is using to calculate their ADUTV.
Speaking directly to AMBCrypto, Ong stated that the Trust Score project was “two months,” in the making, with several factors triggering CoinGecko to revamp their reportage. He added that the current Bitcoin price pump, which began in early April, had “nothing to do with our decision to introduce Trust Score.”
Ong added,
“At the end of the day, we want to guide users to exchanges with the best liquidity and reported trading volume is no longer a good indicator to gauge an exchange’s liquidity hence the need to create Trust Score.”
Since the Bitwise report made news in late-March, two notable events have pushed the market into submission. First, the Bitfinex $850 million cover-up and second, Binance’s $40 million hack. Given that there was a considerable spread between Bitfinex and other top exchanges, the credibility of the suspected exchange has taken a beating.
Referencing the same, Ong stated that crypto-withdrawals are working fine, with some “issues” still present on the fiat withdrawal front. He added,
“In terms of trading activity, Bitfinex is one of the most liquid exchanges in the world and the market still perceives them to be. Our indicators are showing the same.”
For the time being, Bitfinex will not be excluded. However, all exchanges on the list will be monitored and when there are “reasons for concerns,” the “methodology will be altered,” he added.
Another crypto-news and data aggregator, Messari, used the Bitwise information to set up their own cryptocurrency ranking based on “Real 10 Volume,” corresponding to the 10 exchanges mentioned by the Bitwise report. However, CoinGecko will go one step beyond, including website traffic and order-book data, concluded Ong.
The post CoinGecko’s “Trust Score” to combat fake trading volume; will inject liquidity using online traffic and order-book data appeared first on AMBCrypto.
Source: AMB Crypto

CoinMarketCap Forms New Alliance, Announces Stricter Listing Policy

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CoinMarketCap Forms New Alliance, Announces Stricter Listing Policy
CoinMarketCap Data Accountability and Transparency Alliance has already been joined by Binance, Bittrex, OKEx, Huobi, Liquid, UpBit, IDEX, OceanEX, Gate.io, KuCoin, HitBTC and Bitfinex.
CoinMarketCap Forms New Alliance, Announces Stricter Listing Policy

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Source: CoinSpeaker

Exclusive: Bitcoin [BTC] doesn’t care about the Bitcoin ETF, etoro’s Mati Greenspan

Bitcoin [BTC] and its tryst with the US Securities and Exchange Commission is set to climax with the imminent discussion regarding the hotly anticipated ETF, which has everyone in the community on the edge of their seats. Or does it? Some are not swayed by this publicly traded BTC product, stating that it will have little impact on the overarching goal of decentralized currency.
Mati Greenspan, the senior market analyst at eToro, is of this opinion. In an exclusive interview with AMBCrypto, the acclaimed markets analyst chided the ETF stating:
“The idea of the SEC approving a Bitcoin ETF is basically saying that the government is going to approve something that the banks made. I don’t think Bitcoin cares very much about that.”
Speaking initially about the Bitwise Asset Management report submitted to the SEC with reference to their ETF proposal, Greenspan stated that it addressed two key points. Firstly, it shed light on “market manipulation,” and “wash trading,” which the members of the SEC have voiced their concerns regarding. Last month, the chairman of the SEC, Jay Clayton stated he was on the fence regarding the ETF stating the above reasons.
Additionally, the firm also tabled a new method to calculate Net Asset Value [NAV] based on the figures of ten cryptocurrency exchanges reporting “real volumes.”
In light of this report and, in particular, the two key points highlighted by Bitwise, Greenspan added that the proposal has “a good shot” of approval by the SEC. He further added that, after the change in the SEC members, many are “more bullish on crypto.”
Despite the next ETF hearing set for May 19, 2019, Greenspan was fairly certain that the same will be delayed yet again by the SEC. His expectation was echoed by Jake Chervinsky, a member of the securities litigation team at Kobre & Kim who stated, back in March:
“The SEC’s *final* deadlines will be October 13 and October 18, 2019.”
If the ETF is approved by the SEC, it would open “larger crypto investments” allowing hedge fund managers to enter the space. However, in Greenspan’s opinion, this would only add to Bitcoin as an investment vehicle, as these managers will not “try to figure out what cold storage is,” and will only enter for the price volatility. He stated:
“Basically, having an ETF, is another vehicle that they can invest in Bitcoin, in an easy way.”
He added that a “significant impact in the price” could manifest by the approval or rejection of a Bitcoin ETF, however, he cautioned stating that this will affect the market “only for a short period of time.”
The Bitcoin ETF would “go a long way to providing liquidity” to many players in the market, but are just another channel to access Bitcoin’s investment capabilities and these products are not “built on actual Bitcoin,” stated Greenspan. He described Bakkt service as “incredibly positive,” especially their plans of a credit card linked to a “Bitcoin account.”
Overall, these developments will help the case of “adoption” and Wall Street see an increase in volume by a trillion dollars, or so, but the goal of Bitcoin will always remain to become a ubiquitous, universal, censorship-resistant global money, and this will not change concluded Greenspan.
The post Exclusive: Bitcoin [BTC] doesn’t care about the Bitcoin ETF, etoro’s Mati Greenspan appeared first on AMBCrypto.
Source: AMB Crypto

U.S. SEC Delays Its Decision on Bitwise and VanEck Bitcoin ETF Application to May

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U.S. SEC Delays Its Decision on Bitwise and VanEck Bitcoin ETF Application to May
The U.S. securities regulator continues to remain firm on its decision of not approving the Bitcoin ETF anytime soon. Next window for ETF decision now in May 2019.
U.S. SEC Delays Its Decision on Bitwise and VanEck Bitcoin ETF Application to May

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Source: CoinSpeaker

Bitwise Bitcoin ETF Decision set for May, BTC Prices Up 2.3 Percent

Bitcoin prices stable but bullish
Bitwise Bitcoin ETF application decision date put off to mid-May

It will be until mid-May when the US SEC decides on Bitwise Bitcoin ETF. Like the SolidX and VanEck application, this ETF is backed by Bitcoins secured by a third party custodian. Meanwhile, Bitcoin (BTC) prices are stable inside Mar-29 high-low as bulls build momentum towards $4,500.
Bitcoin Price Analysis
Fundamentals
For the second time, the US SEC is putting off their decision on whether Bitwise Bitcoin ETF application meets their requirement and ready for investors. By doing so, the asset management firm joins a long list of applicants including VanEck, SolidX, and CBoE a joint application which the community says stand a change of getting the green lights from the US regulator.
Submitting their file in January, the San Francisco firm plans to roll out a physically backed ETF and after 45 days, the SEC was supposed to make their decision tomorrow. However, the regulator says their decision will be made public in mid-May. Bitwise Bitcoin ETF will track the performance of the world’s largest digital asset from the Bitwise Bitcoin Total Return Index. The index draws prices from trusted cryptocurrency exchanges.
Differentiating itself, their Bitcoins will be stored in a cold wallet by an institutional grade third-party custodian for security and accountability purposes. Should the fund check all the requirements then the NYSE Arca shall list the ETF will Bitwise Index Services will be tasked with producing and servicing the world’s first Bitcoin ETF approved by the strict SEC.
Candlestick Arrangement

After weeks of lower lows, this week’s performance is encouraging. Not only will it close the week on a high, adding 2.3 percent but in line with our last BTC/USD trade plan, Bitcoin prices will for the first time closed above a five-month liquidation trend line.
In a typical bullish breakout, such will encourage participation now that prices are stable above $4,000. Besides, bulls of Mar 5 are now live. This is because of  Mar 27-29 upswings thrusting prices above Mar 16. As a result, our short-term longs are valid with targets at $4,500.
Technical Indicators
Despite these encouraging gains, Feb 24 losses are conspicuous. Once there is a high volume break above $4,500 reversing this slide, risk-averse can trade can begin ramping up. Accompanying this break above should be high volumes exceeding recent averages of 6.5k, Mar 29—8k and preferably Feb 18—37k.
Chart courtesy of Trading View
The post Bitwise Bitcoin ETF Decision set for May, BTC Prices Up 2.3 Percent appeared first on NewsBTC.
Source: New feedNewsBTC.com

Bitcoin [BTC] market resolute against manipulation, claims Bitwise report; dismisses SEC’s concerns

The purists in the traditional financial market realm have always believed that Bitcoin [BTC] can be controlled via a powerful computer network. A recent Bitwise report has, however, calmed allegations that the Bitcoin market is prone to market manipulation.
The report filed by Bitwise Asset Management was presented before the US Securities and Exchange Commission [SEC], in line with their recent application for a Bitcoin Exchange Traded Fund [ETF].
Market manipulation within the crypto-market has always been of concern to the SEC. The regulatory body in subsection 5 of Section 6(b) of the Exchange Act states that exchanges “are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade.” The SEC often cited this subsection while referring to the volatile industry as being prone to frauds and scams.
Bitwise gave two arguments to satisfy the SEC Exchange Act of 1934, namely, unique resistance against manipulation/fraud, and a surveillance sharing agreement with a regulated market of a certain size. The investment firm, based on historical cases, added that the regulated surveillance-sharing reason was of “primary consideration”.
The report claimed,
“That the bitcoin market is protective against manipulation, and critically, that there is a significant, regulated and surveilled market for bitcoin futures.”
Bitcoin: The Commodity
In their defense of the top cryptocurrency’s lack of susceptibility to market manipulation, Bitwise claimed that “Bitcoin is the first digital commodity in the history of the world.” Here, it should be noted that the report hails Bitcoin as a “commodity,” and not as an “asset”.
Bitwise drew three core divergences in the character of Bitcoin to other commodities. Firstly, Bitcoin is fungible, meaning that the cryptocurrency was constant, irrespective of location, unlike natural commodities like gold.
Secondly, Bitcoin can be easily transported via a computer network. Lastly, Bitcoin can be traded on an exchange, allowing users to directly view the price and employ trading strategies for the same. Furthermore, there is an absence of representatives, advisers, and consultants in the decentralized currency realm as anyone is free to trade.
It must be noted that all the exchange volume analysis is based on the figures of 10 exchanges as they record “actual volume,” according to Bitwise.  The exchanges on the list are Binance, Bitfinex, Kraken, Bitstamp, Coinbase, BitFlyer, Gemini, itBit, Bittrex, and Poloniex.
The report added,
“These unique features allow the bitcoin market to be uniquely resistant to manipulation in critical ways.”
Bitcoin: Anywhere, Anytime
Bitwise juxtaposed the ability of the top cryptocurrency to resist market manipulation to scandals that have plagued other markets over the past few years. The report highlighted four key incidents, including the LIBOR scandal of 2012, the Global Forex Scandal of 2013, the Gold Fix Scandal of 2014, and the ASIC Scandal of 2016.
In all the aforementioned scandals, the common elements were a deliberate attempt at manipulating the market by large financial institutions, resulting in heavy fines levied on the culprits.
The traits of fungibility and transportability in the virtual currency market allowed the creation of arbitrage in the market. The opportunities for investors to make a quick buck due to price disparity between exchanges was reported by Bitwise as being negligible.
Given this dominance of market participants, global liquidity can stand in the way of market manipulation, increasing the inability of the market to fall prey to any sort of voluntary change.
Bitcoin: The Distributed Market
Bitcoin’s spread of volume and “distributed market” will prevent one exchange from holding the coin’s price hostage. Of the ten exchanges considered, no one exchange had pure dominance in terms of BTC volume. Binance accounted for the highest volume, chalking up 40.47 percent, and was followed by Bitfinex and Kraken with 13.94 percent and 11.67 percent respectively.
The report concluded by saying,
“The spot bitcoin market is highly fractured amongst ten exchanges, and no exchange has a majority share. This contributes to bitcoin’s unique resistance to market manipulation, as any attempt to manipulate the market must either be coordinated synchronously across multiple exchanges or must involve a significant spike of volume on a single exchange.”
The post Bitcoin [BTC] market resolute against manipulation, claims Bitwise report; dismisses SEC’s concerns appeared first on AMBCrypto.
Source: AMB Crypto

Bitcoin [BTC] market more efficient as arbitrage on exchanges improved, says Bitwise Report

From the standpoint of investors, the cornerstone of the virtual currency market is its volatility. With price fluctuations at every corner, arbitrage-savvy investors would consider the cryptocurrency market a paradise. However, a recent report from Bitwise suggests otherwise.
The report presented to the SEC by the crypto-centric investment firm, Bitwise Asset Management, captured the arbitrage in the Bitcoin [BTC] market over the past 18 months. However, the crux of the research was the difference between actual volume and reported volume, which recorded a deviation of a whopping 95 percent.
It must be noted that the “arbitrage” in question refers to the variance in Bitcoin prices on exchanges, including Binance, Bitfinex, Kraken, Bitstamp, Coinbase, BitFlyer, Gemini, itBit, Bittrex, and Poloniex. This is because these exchanges pose “actual volume”, according to a prior study done by Bitwise.
Looking at the monthly average price deviation based on the price listed by the ten aforementioned exchanges, a consistent decline was seen in 2018. The price deviation in December 2017, when the Bitcoin bull-run began, was over 0.7 percent and since then, the deviation has not crossed 0.5 percent.
January 2018 saw the highest deviation in 2018, accounting for over 0.45 percent, which soon fell to under 0.1 percent by July. As the market went into a freefall after the Bitcoin Cash [BCH] hardfork, the deviation increased to over 0.15 percent. February 2019 saw the lowest deviation in over 15 months when a deviation of 0.05 percent was recorded.
Additionally, the average spread of the 10 exchanges varied from Coinbase Pro’s $0.01 to Bitfiniex’s $0.10, indicative of the accurate tracking between exchanges and small margin for arbitrage trading.
Bitwise cited three main reasons for the consistency in BTC prices across major exchanges. The primary reason was the launch of futures contracts by the Chicago Board Options Exchange [CBOE] and the Chicago Mercantile Exchange [CME] in December 2017. The report stated,
“[Bitcoin Futures] fundamentally transformed the bitcoin market, creating a two-sided market and easy hedging for the first time.”
The secondary reason was the surge in institutional interest, which Bitwise refers to as “institutional market makers.” Jane Street Capital, a trading firm was named by the report as a “leading market maker” entering the crypto-trading business in March 2018.
In July 2018, Europe’s largest ETF marker maker, Flow Trader, began making markets with the Swedish Bitcoin ETN. In the following months, several market makers followed Flow Traders’ lead and ventured into the crypto market. The report added,
“By summer 2018, most major market makers were either present in the bitcoin market or actively exploring the space.”
Cryptocurrency lending at the institutional level also provided immense impetus to the flattening of the arbitrage level, stated the third reason. Prior to the crypto-boom of December 2017, “modest lending” did take place but after the surge, the crypto-lending industry skyrocketed.
Bitwise cited the success of Galaxy Global Trading, a cryptocurrency lending platform, which processed over $1.11 billion in borrowings and lending in 2018 alone, with around 60 percent owing to Bitcoin [BTC]. According to the final quarterly report from the company, despite the decline in Bitcoin’s price, its loan records surged to $153 million active loans, a massive 15 percent increase from the previous quarter.
Based on the three factors presented above, the report suggests that the efficiency of the overall market in 2018 has seen a significant boost. This has allowed both retail investors and institutional investors to establish a commensurate foothold in the market. The investment firm hails this period as being a “dynamic, institutional-quality, two-sided market for the first time.”
Bitwise concluded:
“While future developments, including the proposed launch of a U.S. ETF, may be incrementally beneficial to the market, the spot bitcoin market today operates with an efficiency that matches or exceeds that of other major markets.”
Other findings of the report pointed out that the degree of difference between the Bitcoin Futures market and the Bitcoin Spot market is not as far apart as one might imagine. If adjusted rather than touted trading volume being taken into account, the BTC  Futures expressed as a percentage to their Spot equivalent rises from 1.51 percent to over 33 percent.
The post Bitcoin [BTC] market more efficient as arbitrage on exchanges improved, says Bitwise Report appeared first on AMBCrypto.
Source: AMB Crypto

Bitwise: 95% Of Reported Bitcoin Trading Volume Is Fake

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Bitwise: 95% Of Reported Bitcoin Trading Volume Is Fake
While many use CoinMarketCap as a go-to resource for cryptocurrency market data, roughly 95% of Bitcoin trading volume reported by this website is fake, according to Bitwise Asset Management report.
Bitwise: 95% Of Reported Bitcoin Trading Volume Is Fake

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Source: CoinSpeaker

Bitwise’s report to SEC suggests unregulated crypto exchanges fake 95% of Bitcoin [BTC] trading volume

Bitwise Asset management is in the news after it informed the United States’ Securities and Exchange Commission [SEC] that 95 percent of Bitcoin [BTC] trading volume reported by unregulated cryptocurrency exchanges were fake or non-economic in nature.
The report dated 20 March was submitted to the SEC in line with a rule change as part of their application to launch a Bitcoin Exchange Traded Fund [ETF]. Bitwise’s proposal is yet to receive any response from the SEC.
Data for 81 exchanges recording a trading volume of more than $1 million per day were included in the study. Using exchange data from CoinMarketCap, Bitwise argued,
“Despite its widespread use, the CoinMarketCap.com data is wrong. It includes a large amount of fake and/or non-economic trading volume, thereby giving a fundamentally mistaken impression of the true size and nature of the bitcoin market.”
According to the analysis, the per day Bitcoin trading volume accounted for about $6 billion, in terms of spot markets. However, this figure is misleading, the report said. It adds,
“The vast majority of this reported volume is fake and/or non-economic wash trading.”
This “vast majority” accounts for approximately 95% of the total volume. Bitcoin’s actual market, if the wash trading is not accounted for, is lot smaller, orderly and more regulated than is actually reported.
Bitwise juxtaposed the workings of Coinbase Pro, which they deemed a “real exchange,” and CoinBene, the exchange with the highest BTC volume and deemed a “suspicious exchange.” The former reported $27 million in BTC volume on a per day basis, when compared to the $480 million daily BTC volume recorded on CoinBene.
The report compared the two exchanges’ trade printing on their respective website, web traffic and real-world footprint, suggesting that there was a lack of clarity with exchanges like CoinBene, compared to regulated ones like Coinbase Pro.
“It is surprising that an exchange claiming 18x more volume than Coinbase Pro would have a spread that is 3400x larger.”
On analyzing the hourly candlesticks of “suspicious exchanges,” Bitwise noted that the arrangement and sizes were fairly consistent and hence, did not depict real-time activity. The report cited the example of CHAOEX, which poses an average daily volume of $70 million and indicates a monotonic chart i.e. showing identical volume valuations every hour of the day.
“This volume pattern is insensitive to price movements, news, waking hours, weekends, or other real world factors.”
Despite the false trading volumes, the Bitcoin market “was uniquely resistant to market manipulation,” the report said.  It argued that the market was structured in such a way that outlier coins and unregulated exchanges cannot exert unnecessary control on the collective coin market.
“We have demonstrated that the bitcoin market is an extremely well-arbitraged market, with a proven ability to ignore outlier prices, and that both the fundamental market structure and our specific NAV calculation methodology provide unique protections against potential efforts to manipulate that market.”
Coincidentally, the Bitwise report comes in the same week as a report from The Tie, which stated that some exchanges faked trading volume to attract users to their platform. The main culprits here were BitMAX, LBank, BW, and ZBG. According to the findings, the expected volume of these exchanges was less than 1 percent of their reported volumes.
Several cryptocurrency proponents praised Bitwise’s report and its findings. Anthony Pompliano, the Co-founder and Managing Partner at Morgan Creek Digital stated,
“This report is really important. Please read it.
I couldn’t be more proud to be an investor in @HHorsley @Matt_Hougan @teddyfuse @martha_shear and @BitwiseInvest today”
Jeremy Allaire, the Co-founder and CEO of Circle stated that a report like this was an important precursor for the crypto-market to go mainstream,
“Great work from @BitwiseInvest helping the market understand what’s real and what’s fake. If we want crypto capital markets to go mainstream we need data investors can believe in.”
Tushar Jain, the Managing Partner at MultiCoinCap suggested action against CoinMarketCap,
“This excellent research from Bitwise shows how @CoinMarketCap is completely (and perhaps deliberately) misleading users on exchange volumes. This atrocious behavior from CoinMarketCap deserves some attention from law enforcement.”
The post Bitwise’s report to SEC suggests unregulated crypto exchanges fake 95% of Bitcoin [BTC] trading volume appeared first on AMBCrypto.
Source: AMB Crypto

Trust Only These Ten Cryptocurrency Exchanges, Warns Bitwise Asset Management

Reports of cryptocurrency Exchanges faking trading volume by wash trading have become rampant in the Financial market. What was once perceived to be something based on only suspicion and allegations is now coming out with documented proof.

Bitwise: Actual volume of trading is only $273 million
Recently, TIE had released a report of its independent analysis of discrepancies found in the reported trading volume of exchanges. Furthermore, according to TIE’s research 75% of the Exchanges reported fake trading volume data. However, according to the new report by Bitwise Asset Management, the actual percentage is 90%. Both of them used a different approach but seemed to have reached a similar conclusion.
List of ‘Trusted’ Cryptocurrency Exchanges According To Bitwise
The research parameter for Bitwise Asset Management was ‘trading volume’ data with respect to the amount of Bitcoins held in the exchanges. On comparing the data from several Exchanges, the report found authentic similarities in only ten Exchanges. They also found that nine out of the ten Exchanges have procured the required regulatory licenses. Binance Exchange was the exception out of the 10.
The other nine exchanges that reported authentic trading volume as per the report are BitFinex, BitFlyer, BitStamp, Bittrex, Coinbase Pro, Gemini, itBit, Kraken, and Poloniex.

14/ Other good news when you focus in on the exchanges with real volume: 9 of the 10 are regulated by FinCEN as Money Service Businesses and 5 of the 10 by NYDFS under the BitLicense. pic.twitter.com/uoTmpk8zFC
— Bitwise (@BitwiseInvest) March 22, 2019

 What does it Mean for the Cryptocurrency Markets?

The total volume of trading is an independent factor that does not contribute to the ‘circulating supply’ nor the price. Hence, the total market capitalization is not directly affected by the reported trading volume. However, exaggerated reports of daily volume could affect market sentiments negatively.
The technique used to exaggerate the volume data of exchanges is ‘wash trading.’ By faking their data, the Exchanges are successfully able to climb the rankings on Exchange list according to trading volume. Furthermore, the rankings earn them customers and a heavy coin listing fees as well.
The fake reported data on Exchanges is also a factor behind SEC’s reluctance to pass an ETF based on Bitcoin or altcoins. The regulatory bodies around the world will most likely crack down on the exchanges and weed out the fake data. Nevertheless, the road towards progress is steady and comparable to the current traditional asset like ‘Leveraged ETF.’

20/ We hugely appreciate the SEC being careful with their review of bitcoin ETFs & digging into the detail. Leveraged ETFs took 6 years for approval. Actively managed ETFs nearly 6 years as well. The 5+ year bitcoin journey is not atypical. It's necessary for investor protection.
— Bitwise (@BitwiseInvest) March 22, 2019

What are your views on reported fake volumes data? If it’s true, what steps must the crypto-community take? 
The post Trust Only These Ten Cryptocurrency Exchanges, Warns Bitwise Asset Management appeared first on Coingape.
Source: CoinGape

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Source: CoinSpeaker