A new report has labeled BitMEX, Coinbase Pro, Binance, Bitbank and Gemini as some of the cryptocurrency exchanges with the most legitimate trading volume. The report by Alameda Research delved into five different criteria in determining the legitimacy of an exchange’s trading volume. Exchanges such as CoinBene, BTCBOX and CoinTiger failed in most of the categories.
The first criterion that the firm used was the manual investigation of a website’s trading history. Most exchanges display real-time data, which updates whenever a trade occurs between two parties. The firm compared the trades to orders placed on the order book prior to the trade, and whether they had disappeared immediately after.
However, “many exchanges’ market pages display many trades which never appeared anywhere on their order books prior to the prints themselves occurring.” These include all exchanges which engage in transaction mining such as CoinBene, Coinex, FCoin and BitForex, the report stated.
Alameda also picked some firms whose volumes are generally viewed as legitimate and used them to compare the other exchanges. The legitimate exchanges are mostly based in the U.S. and contain trading pairs primarily involving the U.S. dollar. They include Coinbase, Gemini, Bittrex and Poloniex. The research firm also considered some non-U.S. exchanges which had passed most of the other criteria such as Binance and OKEx. From this criterion, exchanges such as Bithumb, Bibox, OKCoin and IDAX failed the test for legitimate volume.
Alameda Research also judged the legitimacy of the trading volume based on its own trading activities. The firm claims to trade over $500 million daily across most of the popular exchanges. This metric wasn’t used to judge exchanges on which it doesn’t trade. From this criterion, HitBTC, Bibox, Coincheck, CEX.IO and Exmo failed, as did most of the exchanges that conduct transaction mining.
The exchanges that passed all the criteria include bitFlyer, Binance, BitMEX, Liquid, Bitfinex, Coinone, Bitbank, Zaif, Huobi (HBUS), itBit and Gemini. Those that scored the least include Kryptono, Bit-Z, CoinBene, EXX and BigONE.
Alameda concluded by hailing its research as the most conclusive yet in the crypto space. It stated, “We hope that many different sorts of parties can make use of this information—traders can make more informed decisions about which exchanges to turn to for liquidity, exchanges can better understand their place in the landscape, and coin projects can more easily gauge how much interest exists in trading their coins.”
Date: July 11, 2019