Warning: 95% of Crypto Volume is Fake - Don’t Be a Victim!

Did you know that a massive 95% of Bitcoin’s trading volume on some exchanges is fake? If you’re into crypto, this could mean your investments are at serious risk!

Don’t get caught in these traps. I’m here to share some crucial tips on how you can protect your portfolio from manipulated trading volumes. Understanding these tricks can save you from costly mistakes and help you make smarter decisions in the crypto market. Ready to dive in and safeguard your investments? Let’s get started!

1. Check the Volume and Order Book

When you see a token with a high trading volume, compare it to its order book. If the order book is shallow but the volume is high, something fishy might be going on. This means people are trying to make it look like there's a lot of action when there really isn't. For example, back in 2018, the Bitwise Asset Management report found that up to 95% of Bitcoin’s trading volume on unregulated exchanges was fake. Always make sure the order book has plenty of buy and sell orders before you invest.

Akash (AKT) has very high trading volumes compared to its order book depth, even on trusted exchanges. For example, DYDX, which has a similar market value, had much higher bids just below market price: $457,900 on Binance, $209,000 on OKX, and $64,700 on Crypto.com. This is about 3.5 times more than AKT’s average on the top 3 exchanges. This suggests that DYDX has more genuine market activity compared to AKT.

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2. Watch Out for Market Tricks

Market makers help keep things moving in the crypto market, but sometimes they play dirty. Tricks like spoofing (placing orders they never plan to fill) and wash trading (buying and selling the same token to fake activity) can mislead you. In 2020, the Commodity Futures Trading Commission fined multiple firms for such manipulative practices. Knowing about these tricks can help you spot when something’s not right.

According to TokenInsight, APENT (NFT) showed suspicious trading activity. Normally, its 24-hour trading volume on exchanges like KuCoin, Bitget, Bybit, and Gate.io is between $1.7 million and $2.9 million. However, on June 22, during a 6-hour period, the volume suddenly dropped to $250,000. This sharp decline suggests that the previous high volume might have been fake.

3. Spot the Volume Spikes

If you see sudden spikes in trading volume without any big news, be careful. These spikes can mean someone is trying to pump up the volume to attract traders. In 2017, the SEC warned investors about pump-and-dump schemes, which often involve sudden volume spikes to lure in unsuspecting buyers. So, look for tokens with steady, consistent volume instead. A simple rule of thumb: When daily volumes consistently exceed 30% of the token's free market cap, it means there’s unusual activity.

Why This Helps Your Investments

By staying vigilant and informed, you can avoid risky tokens and make smarter choices with your money. This helps you build a stronger, safer crypto portfolio with coins like Bitcoin, Ethereum, Solana, Dogecoin, Shiba Inu, and Litecoin.

Conclusion: Take Action for a Safer Portfolio

The biggest takeaway here is to be cautious and do your research before investing in any token. Understanding these warning signs can save you from making costly mistakes and guide you toward more profitable investments.

Your Next Steps:

1. Subscribe to Crypto Profit 101 Newsletter: Stay updated with simplified and crucial crypto news to make informed decisions. Join us and be part of a growing community of smart investors.

   

2. Open a MEXC Trading Account: MEXC offers deep liquidity and a transparent trading environment, helping you avoid manipulated tokens. Sign up today and take advantage of their reliable platform.

3. Make Informed Investing Decisions: Use the insights you've gained to carefully choose your investments. Focus on tokens with genuine trading volumes and healthy order books. Use tools like CoinMarketCap, CryptoCompare, and Coingecko that show detailed trading volumes and token availability.

Final Thought: Every smart investment starts with knowledge. Are you ready to take control of your crypto journey and make decisions that future-proof your investments? The time to act is now. Happy trading!