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Crypto Aggregator Says Concerns Over Inaccurate Data Are Valid

Crypto Aggregator Says Concerns Over Inaccurate Data Are Valid

(Bloomberg) -- CoinMarketCap.com, one of the biggest aggregators of cryptocurrency market data, said concerns over inaccuracies “are valid” and it will be adding more information to its website to help users make better decisions.

As one of the world’s top 500 most visited sites, CoinMarketCap.com is often where many individual investors turn to for prices, exchange volume and industry rankings. But trading volumes on the top exchanges listed on CoinMarketCap.com have increasingly come into question. Last week, Bitwise Asset Management saying in a report that the site’s "data is wrong."

Bitwise claimed that about 95 percent of Bitcoin exchange trading volume listed on CoinMarketCap.com is fake or noneconomic in nature, "thereby giving a fundamentally mistaken impression of the true size and nature of the Bitcoin market." Bitwise filed the research report with the Securities and Exchange Commission on March 20 as it seeks approval for an exchange-trade fund.

Crypto Aggregator Says Concerns Over Inaccurate Data Are Valid

CoinMarketCap.com has significant influence over the crypto world, including prices: When the site removed a number of South Korean exchanges from its price calculations in early 2018, that resulted in a sharp decline in most cryptocurrencies’ prices listed on the site.

Now that exchanges’ trading volumes have come into question, CoinMarketCap.com plans to offer a set of new tools to bring more transparency to trading, Carylyne Chan, global head of marketing at the site, said in an email late Friday to Bloomberg News. For example, it plans to include liquidity measures, hot and cold wallet balances and traffic data for listed exchanges, she said.

"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,’" Chan said. "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."

These would be the latest in a series of changes CoinMarketCap.com has been making in response to concern about fake trading volumes. Last July, the website said it removed volume requirements for exchanges to be listed. It also introduced 7-day and 30-day volume, and started listing establishment dates for exchanges to help users evaluate them better.

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Dave Liedtka, Brendan Walsh

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