Blockchain technology has been fronted as immutable and crypto exchanges are taking advantage of it to fake Bitcoin trading volumes. As much as it sounds unethical and unprofessional, exchanges are benefiting from the manipulation and fake trade volumes.
With the crypto hype ebbing away, some stakeholders are turning to different tactics to stay afloat in the market. Here are 3 reasons why exchanges are faking Bitcoin trading volumes.
Exchanges Fear for Going Under
Many exchanges have come and gone and the surviving ones need to say afloat and remain relevant despite the changing times and consumer demands. Faking trading volumes is one way of attracting new coin and token listings.
Exchanges with high trading volumes are seen as successful and guarantee more market visibility. However, many have failed to deliver because the trading volumes made public are “doctored”. Some figures do not add up from the look of it and are a good investor wrong decision making recipe.
High New Coin and Token Listing Fees
To get listed on popular exchanges, new coins and tokens are required to pay a set fee which runs into millions of dollars. New market entrants pay the fee in the hope that their coin or token will get the exposure and hit the global market running.
Many new digital assets have spent huge sums of their ICO funds to get listed in high profile exchanges. This makes them get broke before they even start working on their proposed project. Exposure through exchanges is seen as a quick route to mass adoption but it never works simply because an exchange reports high trading volumes.
High Number of Coins and Token Listing
There are exchanges that have listed virtually all coins in the crypto verse. These are purely business driven and they are looking at the profit part of their business rather than serving their users. These exchanges only survive on the fee they charge to list new digital assets.
Trading volumes can make or break a crypto exchange and the higher they appear the better. It is also a marketing gimmick; search engine results will show the trading platforms every time you search for both major and upcoming digital assets.
It is also important to note that not all exchanges fake the trading volumes. Some are well run and trustworthy. It is up to the investor to perform a background check before making a decision on the exchange to use or the coin to invest in.
