Amid the rising concerns of wash trading, digital asset data provider CryptoCompare on Wednesday has launched a crypto exchange benchmark to rank the exchanges.
Per the announcement, the benchmark will rank over 100 active global spot exchanges. The company believes that it will provide investors and traders a comprehensive, granular and reliable source of information on the best trading venues.
A much-needed ranking
CryptoCompare’s new product hit the market when major exchanges are tainted with allegations of market manipulation through wash trading. Earlier this year, BitWise reported to the Securities and Exchange Commission (SEC) that 95 percent of the reported Bitcoin volumes by the crypto exchanges are fake.
“The CryptoCompare Exchange Benchmark shows the problem has been getting worse with lower quality exchanges (ranked C-F1) 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 announcement noted.
What Happens if the US Goes to War with Iran?Go to article >>
To prepare the benchmark, the London-based company has taken into consideration both quantitative and qualitative factors and instead of taking aggregate volume data, it uses correlation-of-volume-to-volatility and standard-deviation-of-volume as inputs to more than 30 metrics.
Commenting on this new product, Charles Hayter, co-founder and CEO of CryptoCompare, said: “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.”
The company already released its rankings for May, according to which, top three most trusted crypto exchanges are Coinbase, Poloniex, and Bitstamp followed by bitFlyr, Liquid, itBit, Kraken, Binance, Gemini, and Bithumb.
The announcement also detailed that the ranking components include geography, legal and regulatory needs, investment, the reputation of the team and the company, data provision, trade surveillance, and market quality.
Yesterday, Finance Magnates reported that CryptoCompare and Nasdaq tied up to launch an institution-focused crypto pricing product.