Forex Trading on the Rise Amid Fake Cryptocurrency Volume Reports


Cryptocurrency was intended to be fully transparent, with everyone being able to trace coins and tokens between different wallets. This would allow the power users to monitor the situation on the market and make sure that everyone is playing fair. And yet, it appears that this idea has failed spectacularly and a lot of data we used to trust for the last couple of years has been wrong.


To understand how and why this happened, you have to go back to the point where it all had gone wrong. To be exact, to the first cryptocurrency exchanges.

How Cryptocurrency Exchanges Obscure the Trade Volume

While blockchain transactions between the wallets are completely traceable, there is one exception to this rule. Cryptocurrency exchanges, when it comes to the wallet structure, exist as a single large wallet that stores the coins for all of the exchange users. All ownership and all transactions are defined exclusively by the internal software of the exchange and invisible to the outsiders.

Most exchanges report the trading volume for each currency, however, it is done in good faith and is neither required nor verified. Which provides the dishonest exchange owners with a unique opportunity to obscure the data.

According to reports from OpenCoinCap, 95% of unregulated trading platforms inflate the trading volume numbers. For some currencies, these numbers are increased tenfold; others go much further. For example, CoinMarketCap reports that Ethereum’s 24h volume is over 4,000,000,000 USD, but OpenMarketCap can verify only 129,000,000.

Why Cryptocurrency Exchanges Provide Fake Trading Volume Reports

There is no definitive proof as to why it happens, so take it all with a grain of salt. However, cryptocurrency exchange owners have two major reasons to inflate trading numbers:
  • Making the exchange look better. If an exchange is popular and has a large trading volume, it may seem more attractive to other users. And the more users the exchange has the larger its profits.
  • Making a currency look better. If the curreny owners do not spend it, the currency is dead and worthless. By inflating the trading volume numbers, the exchange owners make it seem more interesting to the potential investors.
Since the absolute majority of cryptocurrency exchanges are unregulated, it’s pretty hard to make them submit correct data. Current solutions, like OpenCoinCap, simply ignore the reports from unverified exchanges. It’s not perfect since it undoubtedly loses some part of the real trading volume, but it is still better than using doctored data.

Alternative Cryptocurrency Trading Options

Exchanges are a black hole for Blockchain but they are far from the only trading method that makes cryptocurrency trading invisible. For example, there is a large majority of traders that use Forex trading channels.

Forex cryptocurrency trading is still a novelty, but it is actually a good option when it comes to trading for a living. Since trading is done via the CFDs, there is no need to worry about the transaction speeds, and the trading instruments are designed much better. Of course, it goes against the idea of cryptofreedom, but as long as you only care about your profit — it is an objectively better option.

If you want to try cryptocurrency trading via CFDs, check out JustForex. They weren’t the first to launch this option, but their interpretation is particularly slick. You get to use the same software that is used for their Forex trading, and MetaTrader is objectively the best trading software available. If you want to experience a new way of trading crypto — open a Crypto account with JustForex then.