By Bitwise's count, in 2019 about ninety-five percent of the volume the exchanges reported to the public was fake.
One of the founders of a brokerage that is well known today told me many years ago how he made his first capital. It was in the spring of 2013. He had a lot of bitcoins and wanted to sell them, but there simply weren’t enough live buy orders of that size on the exchange back then, and any honest attempt to sell everything at once would have crashed the price long before he got rid of even half. He was selling through one of the largest exchanges of the time, sitting right in its office, and there, by his account, they came up with a scheme. Into the order book, the list of buy and sell orders that every trader can see, they put a wall of buy orders at an inflated price with nobody behind it. The market decided a whale had appeared, ready to take everything, the price went up, prices on other platforms followed, and Chinese buyers, afraid of missing out, rushed in and bought up the entire volume he had put up for sale. That was when bitcoin crossed $100 for the first time in history. The hot potato, as he put it, was passed into someone else’s hands, and with the proceeds he built his business.
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