A recent report claiming that cryptocurrency exchanges are reporting fake volumes has been stirring a storm in the ecosystem. As a result of which, a major cryptocurrency market data resource CoinMarketCap (CMC) has assured its user that it will accordingly rearrange the ranking of member exchanges.
The company confirmed the same on social media on March 25. Arguably, CMC has grown into the industry’s best-known tracking service for the market cap of Bitcoin (BTC) and altcoins, as well as for the activity on exchanges trading them.
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
Last week, Bitwise a cryptocurrency index fund provider claimed that CMC hosts almost entirely fake volume statistics. These fake volumes deceive investors and inflate the profile of affected coins, as explained in the report.
It seems that CMC is heeding the warnings represented in the Bitwise research that being sent to United States regulators for consideration as part of its application to launch a Bitcoin exchange-traded fund (ETF). CMC executives wrote on Twitter.
“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.”
The global head of marketing of CMC, Carylyne Chan elaborated how the site’s rankings would change in future, in an interview with Bloomberg. She stated:
“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.’”
Another research report conducted by the Tie also questioned the exchanges’ reported volumes, bringing CMC under attention and questions from crypto figures. CEO of Binance, Changpeng Zhao argued a coin climbing the site’s rankings alienated experienced investors, who would automatically assume its size was suspect.
Why do exchanges fake volumes? @CoinMarketCap is highest traffic website in our space, and biggest referrer for all exchanges. Ranked high on CMC has benefits for getting new users. BUT at the expense of DESTROYING CREDIBILITY with pro users. Many forget the later part. https://t.co/XTSez5ZRVh
— CZ Binance (@cz_binance) March 19, 2019