GlossaryIntermediate
Wash Trading
Trading with yourself, directly or through coordinated parties, to fabricate the appearance of activity.
Wash trading means a party (or coordinated group) trades with itself, creating the artificial appearance of trading volume, demand, or price activity that doesn't reflect genuine independent market interest.
It can mislead observers about an asset's true liquidity or popularity, and is generally considered a manipulative and, in many contexts, prohibited practice.
Examples
- Wash trading can inflate a token or NFT collection's apparent trading volume without genuine demand behind it.
- Analysts sometimes try to identify and filter out likely wash-trading activity from reported volume figures.