Last week, Bitwise released a research report that revealed just how illusory trading volume numbers are among crypto exchanges outside the United States.
The study, which accompanied Bitwise’s recent Bitcoin (BTC) ETF filing with the SEC, found that around 95% of the Bitcoin trading volume for the top-81 exchanges on CoinMarketCap, the largest cryptocurrency market data aggregation site in the world, is likely fake.
Interestingly, CoinMarketCap agrees with the study. According to a report today by Bloomberg, CMC is well aware of the fake volume problem that plagues the website. In response, the site revealed that it plans to include liquidity measures, hot and cold wallet balances and traffic data for listed exchanges.
We are listening to all our users' feedback, and we are working hard to add a suite of new metrics so users can get a fuller picture of exchanges and crypto on the site. What are some new metrics you would like to see? Share with us. 🙂 https://t.co/ZgEs80lH1S
— CoinMarketCap (@CoinMarketCap) March 26, 2019
“For instance, if an exchange with low traffic has $300M volume and just 5 BTC in its wallet, users will be able to draw their own conclusions without the need for us to make arbitrary judgment calls on what is ‘good’ or ‘bad,'” said Carylyne Chan, CoinMarketCap’s global head of marketing. “We want to state that our philosophy is to provide as much information as possible to our users, so that they can form their own conclusions and interpretations –- and not introduce our own bias into that mix.”
CoinMarketCap will likely look to move fast to address user concerns, as major competitors are already jumping on the opportunity to refine their products based on CMC’s weaknesses. One example being Messari, which introduced two new metrics yesterday: “Real 10,” the trading volume from the 10 exchanges found to have real volume and “Liquid Cap,” an alternative to market cap.
We‘re adding two critical new metrics to our @onchainfx dashboard, products of over a year of research:
(1) “Real 10” exchange volume
(2) "Liquid Cap" market cap alternative
Read more: https://t.co/IVj6lJKlMt
— Messari (@MessariCrypto) March 26, 2019
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.