It is guessed that South Korean cryptocurrency exchange Bithumb has
It is guessed that South Korean cryptocurrency exchange Bithumb has $250 million of fake volume every day since 25th August.
Markets can be erratic but the volatility and unpredictability of cryptocurrency market are incredible. When there is an abnormal influx of trading volume on South Korean crypto exchange Bithumb from last week, it created suspicion in the mind of investors. According to Cynics, it can be classic manipulation but others say it could be an odd API error.
High trading volume indicates that investors are taking interest in the asset class. As from past some weeks cryptocurrency market has started to move in the upward direction. The volume is also increasing as the rising volume is the sign of the return of retail interest. From past some weeks, the average volume has increased from $ 10 billion to $12 billion.
Argentinian analyst and trader Alex Kruger revealed on Twitter that something sinister was afoot. He first posted an image which outlines the daily occurrence of pronounced volume candles at 11:00 AM.
Later Alex issued a tweetstorm to make the picture clearer. He highlighted airdrop of Bithumb noting how the event was created and how the fake volume of $250 million is traded each and every days since 25th August. As an airdrop Bithumb is offering 120% payback of trading charges. The offer is on first come and first serve basis. The daily limit for the offer is 1 billion Korean Won. According to Alex, to take the advantage of the offer one trader or a group of traders have to incur the transaction volume of $27 million in a single day.
As the offer in on first come first serve basis, some traders created the wash volume of over $250 million in just a few minutes to claim the full trading fee airdrop. Traders who have participated in the scheme have earned over $150,000 every day and will continue to earn until the promotion of airdrop will end. According to Alex, it is an expensive marketing campaign.
Different people have different views about the situation. Some think that this step of the Bithumb is just for gaining popularity in the crypto industry while others think it is a simple marketing campaign but Bithumb left a loophole for wash traders. It seems that Bithumb does not have any malicious intention behind the scheme.