Quote from: franky1 on August 01, 2018, 03:07:27 PM

Quote from: Coinblaze on August 01, 2018, 02:39:27 PM

This is disturbing, it makes the case for regulated exchanges...

It doesn't affect the market cap or price directly, but higher volumes can have a few effects:

All these new exchanges are looking to attract new customers, so they try to fake their volume to appear higher in lists of top exchanges.

Altcoins too will try to pump up their daily volume to try to appear to be a good and stable coin.

Scammers trying to make a coin appear to be good or bad can generate a steady stream of fake buy/sell to themselves to try to push the price in the direction they want.

The moral of this story is: don't trust the volume!

you forgot to add if an exchange only does say 200btc volume a day thats usually only 1btc in fee's. no VC is going to buy shares in the the ownership of an exchange that only makes 1btc a day. so some exchanges fake volumes, not to make a coin look good. but to grab some VC money

its also not just exchanges. its wallet custodians faking the 'new walet' per day stats to make it seem that its a good VC prospect for advertising income of a nice increasing customer views site

Yeah and the fake growth gives the exchange more chances for expanding out and building its brand in other sides of the industry as well and market themselves on every corner of the web. Next thing you know they could be doing ICOs and making their own coin. Then they give people commission discounts if they use their coin... like Binance.

It's not an immediately negative effect on prices, but it's a long term draw out. Kind of like buybacks on the stock market, they're just inflating their own value, but this way their doing it with hot air instead of real money.