- December 3, 2019
- Posted by: icoblock
- Category: Uncategorized
According to the popular cryptocurrency monitoring resource, CoinMarketCap, 93% of all Litecoin in circulation changed hands yesterday, December 2nd. As pointed out by one of the prominent analysts in the field, the issue with wash trading is getting out of hand and it’s undoubtedly something to be considered.
Wash Trading Volumes On CoinMarketCap
Mati Greenspan, one of the more prominent and popular cryptocurrency analysts in the field, pointed out yesterday that the issue with displaying wash trading volumes on CoinMarketCap is getting “a bit out of hand.”
I think this wash trading thing is getting a bit out of hand @CoinMarketCap.
Reported 24-hour volume of Tether is nearly 5 times the total market cap.
If we believe these numbers, 30% of all BCH in circulation has traded today, 66% of all EOS, and 93% of all Litecoin. pic.twitter.com/BbpQIYGjg2
— Mati Greenspan [not trading advice] (@MatiGreenspan) December 2, 2019
Indeed, looking at the numbers, things get rather frustrating. What is more, going a bit more in-depth reveals that a lot of the trading volume for Litecoin comes from fairly unpopular exchanges.
This makes the notion of wash trading even more plausible. Wash trading refers to the process where someone simultaneously buys and sells an asset in order to feed false information to the market. As Cryptopotato reported recently, a recent study claimed that 50% of all Bitcoins are subjected to wash trading.
That’s a Problem
There are plenty of examples that could back the claims that a lot of the market’s traded volume is subjected to wash trading.
It’s not just those few cryptocurrencies that Greenspan pointed out that look inflated through the roof. Status, for example, is another one that looks fishy, to say the least. It has a market cap of around $37 million and traded volume over the past 24 hours of $183 million.
Interestingly enough, back in November, CoinMarketCap was under the gun for displaying wash traded volumes once again. The website was supposed to introduce a new “liquidity” metric that addresses these issues. Still, there’s obviously room for development in this particular regard.