Crypto Volumes Gone Nuts

Table of Contents

Why Invstr is cleaning up its crypto coverage

What’s going on?

If you’re an avid cryptocurrency follower then you may have noticed their crazy price volatility. Recent research has surfaced, pointing out that almost 95% of all crypto exchanges’ trade volumes are wildly exaggerated and ultimately incorrect. This has led to vast distortions in pricing and a Wild West feel to the crypto market.

Even some of the most widely quoted crypto exchanges have been revealed to be reporting fake or non-economic trading volume, giving a false representation of the size, nature and health of the bitcoin and wider crypto market.  

Who is responsible?

The ones responsible are the smaller and less regulated crypto exchanges, which claim to be some of the largest exchanges by volume. CoinBene, for example, reportedly tracks $480 million in daily BTC volume, which comes in at a whopping 18x reputable exchange, Coinbase Pro’s, daily volume of $27 million.

These smaller exchanges add fake trades in between the bid-ask price spread to boost volumes in order to give the appearance of higher popularity and legitimacy. Meanwhile, their spreads can extend to as much as a few hundred dollars at a time, indicating extremely low or non-existent volumes. This would never happen on a legitimate exchange which maintains spreads from as little as $0.01, which may widen slightly in times of thin volume but never to the extent seen in these smaller exchanges.  

Reputable exchanges

Invstr’s plan

At Invstr we are all about providing a fun environment where users can learn about the markets and take control of their financial futures. This is why we’ve decided to make some useful adjustments to the game to ensure you receive the most accurate investing experience possible.

Ultra-low liquidity and abuse in the real market has made some of the pairs we offer unreliable and overly volatile for the Fantasy Finance game. In order to maintain the most consistent experience for our valued users, and ensure fair play, we have decided to focus on the core US dollar-backed crypto pairs from the most reliable exchanges.

This means that we say goodbye to some of the less mainstream cryptos, but say hello to a more enjoyable and realistic market experience for all of our intrepid Invstrs eager to learn and develop their investing skillset.

Where to from here?

As with any relatively new market, there will be growing pains and adjustments as time passes. Research has shown that supplementing your portfolio with select cryptocurrencies can bring excellent risk-adjusted returns. We at Invstr believe that any instrument can make a valuable addition to your portfolio when risk and volatility are managed well and accounted for.

Cryptocurrencies will not be for everyone, but with strong research and understanding, they can give you that extra X-factor you’re looking for!

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