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21 September 2021
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Is CoinMarketCap’s New Ranking Measure Flawed? BitMEX, Okex, Deribit Way Down


The rankings list of cryptocurrency exchange from CoinMarketCap continues to receive criticism. After its acquisition by Binance, the crypto community is highly suspicious of it using the largest data tracker website to promote Binance. The doubts were intensified last month as CMC introduced a new independent way to rank the exchanges.

The volume reported on CMC is significantly skewed for the top exchanges like Binance and Huobi Global. While CMC reports a daily volume of $4.1 and $3.9 billion, Coingecko logs $1.4 and $0.8 billion, respectively. Nevertheless, despite the criticism for Binance, the CEO Changpeng Zhao continues to affirm that, if anything, they’re under-reporting their volumes. He tweeted,

Most crypto exchanges report 1 BTC trade as 2 BTC in volume (1 buy & 1 sell), @binance reports it as 1 BTC volume. Effectively, Binance only reports half compared to other crypto exchanges.

Separation of Spot and Derivatives

Looks like the new CMC metrics is designed to favour the spot markets.  Binance DEX is ranked above BitMEX (175), ByBit (177) and Deribit (179) exchanges. Okex which is ranked 14th on Coingecko (spot), and top w.r.t. Open Interest (futures) on Skew is ranked 35th on CMC.

Deribit Exchange tweeted a sarcastic update,

We are glad to inform you that @CoinMarketCap has ranked Deribit exchange at #179 with a liquidity score of 0. We want to take this moment to congratulate all the exchanges on the list that we’ve never heard of.

Furthermore, even if the separation of spot and derivatives is made, the lack of standards on reporting is likely to continue creating confusion in the markets.Advertisement

Still No Standard Metrics

The problem of the fake reported volume was highlighted in January 2019 when Bitwise report highlighted that 95% of the volumes are fake. A lot has changed in the markets since then, there are a lot of new institutional and regulated players in the market now.

However, the problem with global exchanges around fake reporting continues to persist with around 94% inflated reports. On Messari, the total real volume itself it $5 billion, while the reported volume is $82.85 billion. To analyse the volume, traders have had to resort to other sources like order books and other data reporting websites.

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