The fourth quarter of 2016 was a volatile period for the price of bitcoin, as speculation climbed to new heights and exchange-traded volume reached peak levels, according to data provider Bitcoinity.

Even before bitcoin approached $1,000 at the end of Q4, a record 114m bitcoins were exchanged in the month of October alone.

The record was shattered in the following month with 175m bitcoins traded in November, followed by a slight downtick in December with 170m bitcoins exchanging hands.

Exchange-traded volume for bitcoin experienced a 275% quarter-over-quarter increase to 459 million bitcoins in Q4 of 2016, from 122 million bitcoins in Q3.

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Compared the figures year-on-year, trading volume in Q4 of 2016 jumped up 206% from 150m bitcoins traded in Q4 of 2015.

Q4'15 and Q4'16 BTC Exchange Traded Volume

China’s dominance

Yet, the volumes from Q4 only tell part of the story.

A large concentration of exchange-traded volume typically occurs in China’s ‘Big Three’ bitcoin exchanges: BTCC, Huobi and OKCoin (at least, before they recently announced sweeping policy changes).

The trading volume of these three alone totaled 452m bitcoins in Q4 of 2016, a staggering 98% of all trading volume for the quarter, but there is reason to believe that figure may be inflated.

Some investors and entrepreneurs remain skeptical of this notorious metric, stating that the “true volume”, or what the volume would have been if these exchanges charged trading fees, is closer to 85%.

This discrepancy may not sound large, but at 98% of exchange traded volume, China’s volume is about 49x the rest of the world, whereas at 85%, Chinese exchange traded volume is only around 6x as large. That’s an order of magnitude reduction in sheer volume size (approximately 8.6x).

Clearer picture

As the zero-fee era of Chinese exchanges comes to a close and markets begin to stabilize following the election of Donald Trump, it’s anyone’s guess as to where exchange traded volume will fall at the end of the first quarter of 2017.

However, given the shake-ups at the ‘Big Three’, it appears the cryptocurrency community will get a look at the ‘true volume’ results for exchange traded bitcoins in the coming months.

CoinDesk Research will continue to look back on 2016 in our upcoming annual State of Blockchain report.

Subscribe to CoinDesk research for the latest information and updates, or review our Q3 2016 State of Blockchain report here.

Bull and bear image via Shutterstock

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