Analysis of nearly 800M cryptocurrency exchange website visits over the past 6 months: up to 86% of total reported cryptocurrency trading volume is likely fake
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Context & Ripple Effects
This 2019 study is The Block applying its own traffic-based methodology — nearly 800 million exchange website visits — to the numbers exchanges report about themselves, and concluding that as much as 86% of claimed trading volume has no observable user base behind it. It also serves as a free sample of The Block's subscription research product, which went on to publish the volume-tracking series the field now leans on.
The arc matters because the industry kept quoting self-reported volume long after: The Block's own later research tallied over $14T in centralized exchange volume for 2021, with Binance alone facilitating 67%, while decentralized exchanges crossed $1T — figures published without an equivalent traffic audit.
First-order effects
- Investors and ranking services relying on exchange-reported volume were, per this study, working with numbers where real activity may be a small fraction of the headline figure — directly undermining liquidity comparisons between venues.
- Exchanges whose reported volume vastly exceeds their measured web traffic face an immediate credibility problem with the counterparties and listing partners that use those rankings.
Second-order effects
- Data providers such as CryptoCompare, which separately tracked a ~40% monthly volume decline across top exchanges, came under pressure to weight or discount self-reported figures rather than aggregate them at face value.
- Binance's dominance in reported volume — 67% of the $14T centralized total in 2021 — becomes harder to validate independently, giving smaller rivals an argument that leaderboard positions reflect reporting practices as much as activity.
Third-order effects
- If most reported volume is unverifiable, every downstream metric built on it — liquidity rankings, market-health dashboards, valuation models — inherits the distortion, pushing institutional capital toward venues with auditable flow data.
- The pattern feeds the broader legitimacy problem regulators cite: the same opacity that inflates trading volume also complicates oversight of flows, as Chainalysis' laundering estimates show funds concentrating at exchanges.
The trend: Crypto market measurement is slowly shifting from trusting exchanges' self-reported volume toward independently verifiable signals — web traffic, on-chain settlement, and audited flow data.