I’ve said for years that the bitcoin market is a rigged game and good only for gambling and criminal activities. There are many ways to rig the market and inflate prices including “painting the tape” (doing high-priced trades on small volume to give the appearance of a market rally), “wash sales” (trading the same bitcoin back and forth at progressively higher prices to attract suckers to what appears like an upward trend) and simple theft and looting through hacking and other fra‌uds.

All of this (and more) was apparent to seasoned traders through close observation and statistical analysis. This article takes the analysis a step further and looks at actual trading activity on 81 leading crypto exchanges.

The results of the study show that 95% of all bitcoin trading on exchanges is manipulated and fake. Most of the fake trading was done with wash sales, but other techniques were used also. The fake trading does not only affect pricing but also affects data on spreads, volume and costs.

Some of the fake trading was done to increase exchange volumes to attract initial coin offering (ICO) listings. Of course, many of the ICOs are themselves fra‌uds.

All of this frau‌d and manipulation is certain to attract scrutiny from regulators such as the SEC and CFTC as well as the IRS. This pervasive fra‌ud is just one more reason to keep away from cryptocurrencies.

Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.