Asset management company Bitwise said that today's bitcoin spot market is much smaller and more efficient than people generally think.
Bitwise said in a white paper submitted to the Securities and Exchange Commission (SEC) last Friday that the quality and arbitrage of the bitcoin spot market has improved significantly since the beginning of 2018.
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The company said that compared with the comprehensive price , the average price difference of the bitcoin prices of the 10 “real trading” bitcoin exchanges showed a downward trend, indicating that the arbitrage efficiency between the exchanges is getting higher and higher.
The company added that:
“Although the volatility is high, and (sometimes) the overall volume of transactions will decline, this is driven by a number of factors that reflect the maturity of the field.”
Bitwise said the CME (Chicago Business Exchange) bitcoin futures market is also growing steadily.
In addition, the company reiterated the main point of previous reports, saying that about 95% of bitcoin transactions are either fake transactions or money laundering transactions. The data provided by CoinMarketCap and other data providers is “wrong” and “seriously exaggerated”. However, the company also acknowledged that CoinMarketCap has “started a major initiative to increase transparency and ensure timely disclosure and accuracy”.
On the other hand, the "real" bitcoin market is very efficient, Bitwise said:
“When you exclude false trading volumes and data, you get a very efficient and orderly market, a compliant market backed by a large-scale derivatives market.”
“However, the public has almost the opposite view, thinking that the Bitcoin market is disorderly and inefficient.”
According to the report, Binance, Bitfinex, Coinbase, Kraken, Bitstamp, BitFlyer, Gemini, itBit, Bittrex and Poloniex are the only 10 real-time exchanges , and their data are consistent with relevant statistics, including domestic production. Total value (GDP), wealth, network traffic, and blockchain-related venture capital.
The company concluded:
"In this fast-changing era, people's ideas tend to stay in the past. People who see Bitcoin today still think of Mt. Gox, but in fact they should think of Fidelity (the asset management of the cryptocurrency service will be provided) They think of the Silk Road, but in fact they should think of Whole Foods (a large supermarket chain that accepts bitcoin payments). A large part of the Bitcoin ecosystem is of low quality and poor data quality. The currency market is still inefficient, chaotic and prone to problems."
Less than two weeks before the white paper was released, the SEC again postponed a decision on whether to approve Bitwise's proposal for a Bitcoin ETF submitted to the New York Stock Exchange's high-growth board. The regulator has not yet approved any bitcoin ETFs, but experts in the field of bitcoin and some officials of the SEC seem to believe that it is only a matter of time before a proposal that meets all criteria is approved.