They are showing that the methodology that they have for computing the NAV (net asset value) is solid and based on exchanges that do not have fake volume. Also that the effective volume and price sensitivity on those exchanges is reasonable for the asset class. And finally that in order to manipulate those exchanges sufficiently to affect the price and win an arb against the ETF is infeasible.

Yes, it's widely known exchanges wash trade. This does not mean that all their volume is fake. And it's true mex only trades contracts, but I'd note they're traded only with BTC collateral so bitcoin is still exchanged.

For the most part, this report basically ignores Asian exchange volume.

Well, the study shows that there are legit exchanges, so there is some place for the usual market forces to apply (and indeed, the price of Bitcoin on these exchanges lies in a tight band, too small for arbitrage opportunities). That doesn’t mean the price of Bitcoin can’t be manipulated by pump & dump or other price manipulation schemes.

But still, the study (at least the highlights given in the twitter thread) looks solid and well-presented.

This presentation was given with regards to a proposed "Bitwise Bitcoin ETF Trust" that the SEC is considering for approval.

Direct link to ETF research PDF linked from the thread:

https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...

Interesting things to see in the hundreds of pages:

page 24: What Do Real Exchanges Look Like?

page 43: Trade Size Histograms For Suspect Exchanges

page 57: Applying All Three Analyses: BitForex

page 111: We Have Reached The Point Of Diminishing Returns For Improvements In Efficiency

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