Bitwise Asset Management argues that today’s bitcoin spot market is “ significantly smaller and noticeably more efficient” , this is more than its perceived generally.
Bitwise on Friday said in a white paper presented as comments to the U.S. Securities and Exchange Commission (SEC) “that the quality of the bitcoin spot market has improved since the beginning of 2018 and the strength of arbitrage in that market has gone up too.”
According to the firm, there is a downward trend as it shows in the average deviation of bitcoin’s price on the 10 “real” bitcoin exchanges, as measured against the consolidated price this shows a downward trend, indicated increased efficient arbitrage between the various exchanges.
It also added that “This comes not withstanding high volatility and sometimes declining overall trading volume, and as such is being driven by a large number of factors that reflect the growing maturity of the space.”
The CME bitcoin futures market has also recorded some steady growth according to Bitwise.
Speaking further, it maintained the major point from its previous report that , most of this bitcoin trading volume is fake volume. That 95% of all the bitcoin trading volume reported are all fake. The firm believed that most of the reports coming from CoinMarketCap and other data aggregate are not right and also being generally. The however said, CoinMarketCap embarked on ways to address the issue and bring up plans to improve on disclosure, accuracy and transparency.
Bitwise reported that: “ Bitcoin market is quite efficient, for instance, if you remove the fake volume and fake data from the calculation, you will be left with an extremely efficient and orderly market of significant measure.”
In the statement;
“however, public perception has nearly the opposite point-of-view, as they see the bitcoin market to be known for disorderly and inefficient.”
The only 10 exchanges with real trading volumes according to the white paper as presented are Coinbase, Binance,Bitfinex, Kraken, Bitstamp, BitFlyer, Gemini, itBit, Bittrex with numbers that align really with related real-world statistics, which includes gross domestic product, wealth, web traffic and other blockchain-related ventures.
The firm concluded that:
“People’s perceptions often anchor in the past during rapid change. when people should be thinking about Fidelity, they still think about Mt. Gox, the talk about Silk Road, when they should be thinking about Whole Foods.”
The poor quality of data that inform large parts of the bitcoin ecosystem made the situation worse, this can create the perception that the market remains inefficient, chaotic and prone to several issued.”
To approve or reject Bitwise’s bitcoin exchange-traded fund (ETF) proposal filed with NYSE Arca, the decision came later after being delayed by SEC and in less than two weeks after the white paper. The regulator as well is yet to approve any bitcoin ETFs, though experts in the space and officials with the agency seem to believe that it’s a matter of time before all this proposals takes another shape to the expected direction.
CREDIT: Yogita KhatriJOIN OUR COMMUNITY