Wash Trading: Everything You Need to Know

What is Wash trading? Wash trading in crypto refers to a form of market manipulation where a trader buys and sells the same asset repeatedly to create the illusion of high trading volume or to manipulate the price.

Why It Happens: Market Manipulation Increased Visibility Profit through Arbitrage

Risks of Wash Trading: Misleading price signals Manipulated prices Regulatory issues

Real Life Example: In 2017, it was alleged that Bitfinex used Tether to artificially inflate BTC's price by buying & selling BTC between accounts resulting a false impression of market demand

Conclusion: Wash trading manipulates market volume and prices, misleading traders. Stay cautious and rely on genuine market signals.