NEW YORK—On any given day, as much as two-thirds of the transaction activity registered on the Bitcoin network has nothing to do with buying goods and services or trading the virtual currency, a new analysis has found.
“Volume figures are being influenced by a range of other factors such as so-called mixers reshuffling balances between their own accounts, mining pools disbursing coins to members, outright scams such as spoofing and market manipulation,” reported Bloomberg, citing Coinmetrics data.
Bitcoin isn’t alone. On a recent day, more than 45% of transactions on Ethereum are non-economic, such as spam, Bloomberg said.
“At one point, 98% of transactions on the digital token Cardano had no economic value,” Bloomberg reported.
While the anonymity of the blockchain is one of the key founding principles of Bitcoin, the lack of transparency on the distributed ledger technology is seen by some industry participants as a hindrance to greater acceptance by both institutional and individual investors, as well as regulators, noted Bloomberg.
“If this space is not a joke but serious, then people need to know more,” said Charlie Morris, who manages $300 million for London-based Newscape Capital Group, in the Bloomberg report. “You’d want to know the facts. If institutional money is going to come into Bitcoin, they’ve got to understand what they are buying.”