NFT Wash Trading Volume Surges to $580M Across Top Six Marketplaces

In February 2023, the top six nonfungible token (NFT) marketplaces experienced a significant surge in NFT wash trading, with a total volume of $580 million, up 126% from the previous month. The six marketplaces included in the report were Magic Eden, OpenSea, Blur, X2Y2, CryptoPunks, and LooksRare. Of these, X2Y2, Blur, and LooksRare played the largest roles in February’s volume for NFT wash trading, with $280 million (49.7%), $150 million (27.7%), and $80 million (15.1%), respectively.

NFT wash trading is the manipulation of trade volume or price through repeated transactions. While this practice is illegal in traditional financial markets, the lack of clear regulations in the crypto space has allowed it to occur in both the broader crypto market and with NFTs.

The CoinGecko report revealed that NFT wash trading made up a combined 23.4% of “unadjusted trading volume” across the industry’s six largest marketplaces. The report also noted that some of these marketplaces have incentivized users to increase trading volume via transaction rewards.

It’s worth noting that NFTs have become increasingly popular in recent years as a new form of digital asset ownership. They can represent anything from artwork to music and even tweets. The unique characteristics of NFTs, such as their limited availability and authenticity, have contributed to their popularity.

However, NFT wash trading has become a major concern for the industry, with many experts warning of its potential impact on the market. Back in January 2023, crypto investor Mark Cuban said that wash trading would cause the next “implosion” in the crypto market. In response to this issue, new artificial intelligence-based technology has surfaced, which aims to troubleshoot issues in the NFT market, including wash trading.

In addition to the rise of NFT wash trading, a recent scam has also surfaced in the NFT market. On March 16, 2023, fake Blur token airdrop websites were discovered, from which $300k was successfully stolen. The incident highlights the need for better regulation and security measures in the NFT market.

In conclusion, while the rise in NFT wash trading volume may be a sign of the market’s recovery, it also highlights the need for increased regulation and security measures to protect investors and prevent fraudulent activities.


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Bitcoin’s Volume Dominates Performance More than Volatility, Cumberland Suggests

Even though some analysts have stipulated that Bitcoin’s volatility is a cause for concern, crypto trading firm Cumberland believes volume is what matters the most.

Cumberland stipulated that Bitcoin volume “remain absolutely massive,” given that BTC derivatives worth approximately $50 billion are cleared on crypto exchanges daily. As a result, the firm believes that the daily crypto activity might be at least $100 billion, nearly a fifth of U.S. stocks.


Source: Glassnode

As Bitcoin continues ranging between the $19K and $20K zone, volatility has slipped to the lowest level this year.

Nevertheless, Cumberland suggested that the slashed volatility does not show a lack of interest in the crypto space because an analysis of such magnitude “is deeply problematic,” given that it “obfuscates the critical difference between trading volumes and price volatility.” 

The firm added:

“Recent volatility-driven concerns about the health of the crypto space likely stem from comparisons to the bear market of 2018, when volumes were dire. This time is different.”

BTC volatility?

With Bitcoin volatility levels grinding to yearly lows, a surge might be on the horizon, according to Glassnode.

The market insight provider explained:

“The Bitcoin market is primed for a burst of volatility, with both realized and options implied volatility falling to historical lows. Futures open interest has hit all-time-highs, despite liquidations being at all-time-lows.”

There are also indicators that BTC volatility might explode, given that daily Bollinger Bands (BB) continue to tighten.


Source: MatthewHyland

Meanwhile, Caue Oliveira, the lead on-chain analyst at BlockTrends, recently noted that BTC might be gearing towards a significant movement because traders are eager for some change, Blockchain.News reported. 

Image source: Shutterstock


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Bitcoin Transaction Volume Turning Normal after a Bumpy Month

Bitcoin started to normalise after its transaction volume slipped last month, according to market insight provider Santiment.

Santiment explained:

“Bitcoin’s biggest July transactions primarily happened during the bottom, and transaction volume is beginning to normalize now.”


Source: Santiment

The leading cryptocurrency recently dipped to lows of $17K, which contributed to the dwindling transaction volume.

Nevertheless, BTC has regained momentum and breached the $22K, with its price hovering around $22,900 during intraday trading, according to CoinMarketCap

Market analyst Michael van de Poppe also believes Bitcoin might be staring at the bottom, given that the uncertainty surrounding various crypto lending platforms like Celsius and Voyager has triggered the crash. He pointed out:

“So, not only forced selling from 3AC, LUNA & UST, but also Voyager, BlockFi and Celsius have been causing the markets to crash. On top of that, Tesla did sell 75% of their Bitcoin purchases towards cash. That’s what caused the crash. That’s also why we’re close to the bottom.”

Electric car manufacturer Tesla revealed that it sold $936 million worth of Bitcoin, or 75% of its holdings in the second quarter, symbolising a change of tune, given that the company’s CEO, Elon Musk, has been a notable crypto advocate. 

On the other hand, crypto analyst Ali Martinez stipulated that caution should not be thrown to the wind in the BTC market and said:

“Approach Bitcoin with caution. The TD Sequential presents a sell signal on BTC four-hour chart. A sustained four-hour candlestick close below $23,600 can trigger a correction for BTC to $22,500 or even $21,670.”


Source: AliMartinez

Mike McGlone, a Bloomberg Intelligence strategist, recently stated that the upcoming interest rate increase by the Federal Reserve might be a drawback to Bitcoin’s rally. 

Image source: Shutterstock


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Derivatives DEX dYdX beats out Coinbase by volume amid China FUD

Decentralized derivatives exchange dYdX has seen a surge in trade activity as concerns surrounding a renewed Chinese crypto crackdown have circulated this year, with the DEX now processing more volume than Coinbase for the first time.

According to CoinGecko, dYdX has facilitated more than $4.3 billion worth of trades in the past 24-hours, beating out Coinbase $3.7 billion in volume by nearly 15%. DYdX founder and former Coinbase employee Antonio Juliano celebrated the milestone in a Sept. 27 tweet.

The surging growth for dYdX comes amid renewed concerns regarding the threat heavy-handed Chinese regulation could pose for the global crypto sector.

On Sept. 24, Beijing intensified its crackdown on crypto assets by banning all digital currency transactions. The People’s Bank of China said in a statement that cryptocurrencies are “not legal and should not and cannot be used as currency in the market.” As reported by Cointelegraph, China has “banned” or caused FUD in the crypto space on 19 separate occasions since 2009.

In a Sept. 26 tweet, China-based crypto reporter Colin Wu noted a recent surge in demand for decentralized exchanges and other DeFi products among Chinese users, stating:

“A large number of Chinese users will flood into the DeFi world, and the number of users of MetaMask and dYdX will greatly increase. All Chinese communities are discussing how to learn defi.”

In late June, one of China’s largest crypto exchanges, Huobi, banned domestic derivatives trading. The following month, Huobi closed its China-based exchange operator as pressure from Beijing escalated before halting all new registrations for Chinese users on Sept. 24.

Over the past 6 months, dYdX has grown by 19,700% in terms of daily exchange trade volumes which were just $22 million at the end of April according to CoinGecko.

Coinbase comparatively has remained relatively flat in terms of exchange volume growth over the same period with around 6%. Coinbase volumes did surge to an all-time high of $19 billion in late May when crypto markets were also at their peak.

Wu also noted that other derivatives exchanges were seeing an uptick in Chinese registrations, stating “FTX registrations may also be on the rise. The Chinese community is sharing its registration link.”

DYdX offers a range of perpetual contracts on various crypto assets allowing traders to hold leveraged positions without using contracts with a fixed expiration date.

Related: dYdX exchange releases governance token, making its airdrop worth up to $100K

L2beat, which tracks data for layer two protocols, is reporting that dYdX is currently second in terms of total market share with around 19% and $478 million in total value locked, an increase of 20% over the past 7 days.

In September 2019, Coinbase invested 1 million USDC stablecoins into dYdX in what it called a USDC Bootstrap Fund. In June this year, dYdX raised $65 million in a Series C funding round led by venture fund Paradigm.