BitForex's Trading Volume Suddenly Skyrockets, But Is This Surge Organic?

📰 News
Thu, 08/02/2018 - 20:09
Put your
crypto to
work
  • 1.30

    Interest per week

  • 67.5

    Interest per year

  • 3.60

    Interest rate

Join Now!
Sponsored by Celsius.Network
  • {{ content.field_content_author|field_value|getauthorname|raw }}

    Chinese exchanges keep resorting to shady practices in order to artificially increase their trading volumes

BitForex's Trading Volume Suddenly Skyrockets, But Is This Surge Organic?

BitForex, a relatively young Chinese cryptocurrency exchange, has recently experienced an unprecedented increase in trading volume up to $14 bln (currently sitting at $5.1 bln). However, this sudden spike is certainly attributed to the adoption of trans-fee mining, which becomes increasingly popular with small exchanges that want to artificially inflate their stats.

card

A Cinderella story

The Singapore-based exchange was launched only in February 2017 but has already elbowed out all heavyweight competitors like Binance, Huobi and so on. This sudden (but a very short-lasting) increase in its trading volume is inextricably connected to the release of their BF token which immediately started being actively traded on BitForex generating huge numbers. The emission will reach 10 bln tokens while BF token holders will get 80 percent of the trading fees.         

What’s the deal with trans-fee mining?

While it is common for many reputable exchanges to release own tokens, BitForex (along with similar “literally who” exchanges) takes the matter a bit further by adopting the aforementioned trans-fee mining model. The essence of this mining model consists of issuing tokens that correspond to the amount of trading fees paid by a user. Hence, it allows the exchange to significantly increase its trading volume in no time and gain recognition (BitForex is currently the number one exchange on the CoinMarketCap list).

Due to the fact that the crypto industry still pretty much remains the Wild West with practically no regulations, non-reputable exchanges can take advantage of this to boost their number and attract naïve investors. Wash trading is strictly prohibited on any regulated market.

card
 

{{ content.field_content_author|field_value|getauthorname|raw }}

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

Recommended articles
Binance CEO Mocks Crypto Twitter Panic: 'With Healthy Retrace, Everyone Is Scammer'

Binance CEO Mocks Crypto Twitter Panic: 'With Healthy Retrace, Everyone Is Scammer'

Binance CEO Reveals Whether Bitcoin (BTC) Price Can Be Manipulated by Exchanges

Binance CEO Reveals Whether Bitcoin (BTC) Price Can Be Manipulated by Exchanges

Ripple Fires off 900 Mln XRP From Escrow – Shortly After Releasing 1 Bln XRP

Ripple Fires off 900 Mln XRP From Escrow – Shortly After Releasing 1 Bln XRP