May was a bumper month for bitcoin cash and ethereum. Both digital assets saw a major increase in global trading volume compared to the month prior. BTC held steady, averaging $200 billion a month, but ripple didn’t fare so well, recording trading volume that was down 86% since January, mirroring its decline in price.
Also read: Decentralized Exchange Compendium ‘Index’ Lists Over 200 Dex Platforms
Bitcoin Cash Is May’s King of Coins
There are various ways to measure a cryptocurrency that’s in demand, with trading volume the most useful indicator after price. A lot of bitcoin cash changed hands in May – 140% more than in the month prior in fact. Diar’s weekly update highlights the big winners and losers in the cryptocurrency market in May, and shows the substantial demand for BCH. In total, $30 billion of bitcoin cash changed hands in May. The next biggest gainer was ethereum, whose trade volume was up 50% on April, resulting in monthly trading volume of over $80 billion.
Most major cryptocurrencies saw an increase in trading volume in May including litecoin, which had a modest increase. There was one notable loser however – ripple. XRP trading volume has been on the decline since January, back when $100 billion of tokens were traded in a month, pushing the price of XRP north of $3. Reality has since settled in, and May saw just $16 billion of ripple traded.
Fake Volume Rears Its Head
When it comes to analyzing trading volume, one topic that often crops up concerns fake volume. Exchanges and their traders are frequently accused of creating orders that they have no intention of fulfilling, which creates a false impression of liquidity. If traders are doing so, it’s likely bot-based as a means of market manipulation in the pursuit of profit. If exchanges are responsible, it’s likely to make their platform look more popular than it is, and to benefit from the additional custom that comes from being a top ranked global exchange by volume.
Binance is the latest exchange to have faced accusations of fake volume, with certain coins displaying unusually high volume for short periods of time, comprising fluctuations that appear outwith normal trading patterns. Given the hundreds of thousands of traders who can be using a platform such as Binance at one time, including countless bots connected via API, determining which orders are real, which are fake, and who’s responsible for any manipulation, is virtually impossible.
Do you think fake volume is a problem on major exchanges? Let us know in the comments section below.
Images courtesy of Shutterstock, and Diar.
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The post Bitcoin Cash and Ethereum Trading Volume Soars But Ripple Keeps Falling appeared first on Bitcoin News.
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