The fake market in crypto

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 19 September 2022

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

According to a Forbes report, half of all Bitcoin trades are fake. Today, we unveil crypto's cryptic facade by diving deep into a classic concept: Wash trading.

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Transcript

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0:00.0	NPR.
0:11.9	This is the indicator from Planet Money I'm Whalen Wong.
0:14.8	And I'm Paddy Hirsch.
0:15.8	We were reading Forbes magazine recently and a headline jumped at us.
0:20.2	It said, more than half of all Bitcoin trades are fake.
0:24.1	Half!
0:25.1	50%.
0:26.1	This is not a small thing.
0:27.8	As many as 46 million Americans own Bitcoin, which is the biggest and most popular crypto
0:33.3	asset in the market today.
0:35.3	The exchanges that deal in Bitcoin claim that they trade $262 billion worth of Bitcoin
0:42.1	every day.
0:43.1	If half of that volume is fake, it means a lot of people are in danger of being scammed.
0:49.0	Yeah, that's pretty scary.
0:50.0	And there are a lot of ways that unscrupulous traders can generate this kind of fake volume.
0:54.2	But one of them was prevalent.
0:55.5	There's something called wash trading.
0:57.5	This was a kind of a new term for us, not surprisingly, because wash trading has actually
1:01.0	been banned on regulated market exchanges in the United States since 1936.
1:06.7	So, on today's show, we're going to take a look at wash trading to find out what it is,
1:15.4	why it's happening in crypto markets today, and what that means for crypto assets like
1:19.9	Bitcoin and NFTs.
	...

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