Bitcoin Trading Volume
Most of the Bitcoin trading volume reported by aggregators like CoinMarketCap, is fake. Many Bitcoin exchanges employ elaborate wash trading techniques to inflate the reported daily trading volume, in an effort to attract new users.
This page curates a list of Bitcoin exchanges that do not engage in wash trading practices. To make navigation of the data easier, we split the list in two categories: Bitcoin spot trading volume and Bitcoin futures trading volume.
You can learn more about Bitcoin trade volume characteristics, fake Bitcoin volume and our data source, at the bottom of this page.
Bitcoin Spot 24h Volume: $3,086,663,833
Spot Exchange Volume Updated Hourly
Bitcoin Futures 24h Volume: $20,333,750,579
Futures Exchange Volume Updated Hourly
Why is Bitcoin volume important?
Trading volume measures the interest there is in a market, this is as true for equities, as it is for Bitcoin. High trading volume generally means that the market is very active and healthy, while low trading volume indicates indecision or disinterest by market participants.
Volume can also serve as a proxy for liquidity, since deep orderbooks often attract large traders, which leads to higher trading volumes. However, as we will explore in the next section, this isn’t always the case in unregulated markets like Bitcoin.
Finally, as you may have noticed in the Bitcoin exchanges listed above, futures markets tend to have substantially higher trading volumes than their spot market counterparts.
The reason for this is simple:
- High leverage: Bitcoin futures exchanges enable their users to trade with up to 100x leverage. This enables traders to use their capital more efficiently, which boosts trading volumes.
- Low trading fees: Trading fees on futures markets are often up to 50% lower than on spot markets.
That said, even though BTC futures are often more liquid than BTC spot markets, it is still the latter that usually leads the direction of the market.
What is fake Bitcoin trading volume?
Many Bitcoin exchanges create fake trading volume through the practice of “wash trading”. In simple terms, wash trading consists of a party trading with itself, in order to generate misleading trading activity.
For example, if the current price of Bitcoin was $7,500, the exchange could post a sell order for 1 BTC at $7,501, and then immediately fill that order before anyone else can. Now, the exchange could report $7,501 in trading volume, even though no assets changed hands.
Wash trading has been illegal in the United States since 1936, after traders used it to manipulate stock prices. However, the unregulated nature of Bitcoin markets, makes it hard to crack down on this practice.
Why do Bitcoin exchanges fake volume?
The goal of reporting false volume is pretty straight forward: it creates the illusion of a popular trading venue.
Exchanges can monetize this illusion in three main ways:
- The high volume figures attract real users to the exchange, which then results in increased real trading volumes, and hence profits.
- The exchange has its own coin, which value is tied to the exchange’s volume. e.g. the exchange could say that it uses a 25% of the revenue generated through trading fees to buy back coins, which should drive the price up. Fooled by the fake trading volume, investors might purchase the coin in anticipation of rising prices, enabling the exchange owners to offload their coins at a profit.
- As in the first option, fake trading volume attracts new users. However, instead of profiting in the long-term through trading fees, the exchange could exit scam and steal all the users funds.
The sad reality is that cryptocurrency price sites, like CoinMarketCap, rank Bitcoin exchanges by volume without giving any consideration to whether the reported figures are correct or not. This incentivizes faking volume, at absurd levels.