CryptoCompare debuts cryptocurrency Exchange Benchmark to tackle fake trading volume
Thu, 13 Jun 2019, 06:00 am UTC
Crypto data and indices provider CryptoCompare has launched its first cryptocurrency Exchange Benchmark which ranks over 100 active spot exchanges worldwide.
The launch comes amid growing concerns of wash trading and incentivised trading schemes being used by cryptocurrency exchanges to inflate volumes.
CryptoCompare said that its Exchange Benchmark shows “the problem has been getting worse with lower quality exchanges (ranked C-F) increasing market share by 30% in the last 12 months, demonstrating the need for a ranking methodology that does not rely on aggregate volumes.”
The new product, it said, will offer investors and traders a comprehensive, granular and reliable source of information on the best trading venues.
“In response to industry concerns over inflated volumes and the lack of reliable metrics for assessing cryptocurrency exchanges, we are excited to launch the CryptoCompare Exchange Benchmark. We look forward to bringing greater transparency to the digital asset class and improving decision-making for market participants by providing a dataset they can trust,” Charles Hayter, Co-Founder and CEO of CryptoCompare, said.
The Exchange Benchmark employs both qualitative (due diligence) and quantitative (market quality based on order book and trade data) approach and uses correlation-of-volume-to-volatility and standard-deviation-of-volume as inputs to CryptoCompare’s 30+ metrics. It will feed into CryptoCompare’s aggregate indices to create reference rates for the top tier exchanges, establishing a new, trustworthy dataset.
In its press release, CryptoCompare said that the most trusted exchanges based on the analysis of exchange data for the period 1st-31st May 2019 include Coinbase, Poloniex, Bitstamp, bitFlyer, Liquid, itBit, Kraken, Binance, Gemini, and Bithumb.
The analysis, it said, is based on public information with ranking components including various factors such as geography, legal/regulatory, investment, team/company, data provision, trade surveillance, and market quality.
The launch comes on the heels of a recent collaboration between CryptoCompare and Nasdaq to launch a cryptocurrency pricing product, which will be available on Quandl, a Nasdaq-owned data platform providing financial, economic and alternative datasets.
Last month, CoinMarketCap announced Data Accountability & Transparency Alliance (DATA) which aims to enhance cryptocurrency data reporting standards across the industry. Binance, Bittrex, OKEx, Huobi, Liquid, UpBit, IDEX, OceanEX, Gate.io, KuCoin, HitBTC, and Bitfinex, have already joined the initiative. In addition, CoinGecko also announced a new “trust score” for ranking cryptocurrency exchanges to address the growing problem of fake volume data.
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