Decentralization is undoubtedly one of the key tenants within the cryptocurrency community, both with the virtual currencies and the exchanges. However, recent reports point to a manipulation of sorts as these exchanges’ reported volumes do not correspond with their actual figures.
The above was indicated by a Bitwise report which suggested that 95 percent of the trade volume is “fake and/or non-economic” stoking concern within the market. Mati Greenspan, a senior market analyst at eToro, in an exclusive interview with AMBCrypto, suggested that Bitwise’s report which demarcated “real exchange” from “fake exchanges” points to the decentralized nature of the market.
In Greenspan’s opinion, what the Bitwise report indicated was not “not a bad thing”. He added that the variance of “95 percent” could have very easily been 10 percent on the lower side or 99 percent on the higher side. If the game was to fudge numbers, the culprits would push the figure as much as possible and not hold back, in his opinion.
“The 95% isn’t as significant as the number of exchanges that are actually reporting true volumes, and are not doing wash trading. That number is 10, and that is a very good number.”
According to the report, the ten exchanges that report “real volume” are Binance, Bitfinex, Kraken, Bitstamp, Coinbase, bitFlyer, Gemini, itBit, Bittrex, and Poloniex.
Greenspan stated that this exchange variance shows that the Bitcoin trade dominance is spread out, which points to a firm decentralized nature, especially compared to its traditional equivalent the stock market. In his words:
“This actually shows, that the Bitcoin market, is decentralised. In most markets you have one exchange, that’s basically the arbiter, that’s saying what the price is.”
He added that one dominant exchange, in other markets, provides the “price feed” for other exchanges to operate by. However, in the cryptocurrency market, there is a multiplicity of ten different exchanges that provide this same price feed.
Greenspan also shed light on the arbitrage efficiency of the Bitcoin market currently, compared to the 2017-2018 high, as analyzed in the Bitwise report. The report stated that in December 2017, the BTC price deviation between the aforementioned ten real exchanges was 0.7 percent, Currently, the figure has dropped to 0.1 percent. He added:
“The fact that we have those ten exchanges and that there is very little price difference in the price of Bitcoin on each of those exchanges shows that we have very good price discoverability in this market.”
The senior market analyst further referenced Messari Crypto’s “Real 10 volume” metrics which tracks the trading volume based on Bitwise’s “real exchanges” via their OnChainFX dashboard. Based on the figures indicated by Messari, Greenspan concluded:
“It shows that we have quite a solid and stable market here.”
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Bitcoin’s censorship resistance, freedom make it a game changer in the economic industry
Over the years, the global economic industry has witnessed significant changes. However, no change has been more significant or essential than the one introduced by the concept of virtual assets or Bitcoin. Today, Bitcoin and other virtual currencies are almost as essential as fiat money and despite the fact that digital assets have not reached worldwide adoption, the pace of growth has been substantial.
In a recent panel discussion, Jedidiah Taylor, CEO and Founder of Decent.Bet, the smart contract-based sports betting platform, stated that the idea of Bitcoin and blockchain technology projected a perspective of freedom and honesty which allowed individuals to have direct control over their own capital, without any oversight supervision from financial institutions.
The sentiment was followed by Nico De Jonghe, Founder and CEO of NDJ Investment Group, who added that the threat of decentralized assets loomed the largest over centralized institutions like banks, who were worried of the future prospects offered by Bitcoin and its impact on the long-term financial situation.
Tone Vays, a reputable analyst and Bitcoin proponent, opined and stated that Bitcoin’s biggest strength was the fact that it was completely “unconfiscatable” and that one’s BTC is completely safe if it is protected and secured with attention. The characteristic of censorship-resistant value transfer is also an absolute game-changer for Bitcoin, allowing it to competitively exist in the financial system.
The value of Bitcoin has often been criticized in the past, but its valuation has consistently proven its worth. In fact, Bitcoin has grown by more than 150 percent in 2019.
At press time, Bitcoin was priced at $11,371, with a market capitalization of over $202.18 billion. The staggering valuation of an asset that was unheard of 10 years ago, further underlines the potential of Bitcoin in the current market scenario and for the future economies.
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