One of the most trusted websites on cryptocurrency ranking, CoinMarketcap, has come under intense scrutiny after a certain report by Bitwise was made public sometime last week.
The report by Bitwise had said, “The real market for bitcoin is significantly smaller, more orderly, and more regulated than commonly understood. “95% of Bitcoin trading volume is fake and/or non-economic in nature.”
As earlier reported by Crypto-News India, Bitwise had analysed the trading data of nearly 81 crypto exchanges and found 71 of them are suspect in faking the trading volume. The 10 exchanges that report actual trading data are Binance, BitFinex, Kraken, Bitstamp, Coinbase, bitFlyer, Gemini, itBit, Bittrex, and Poloniex. The report has blamed CoinMarketcap for this fiasco and all the reputed firms like Wall Street Journals and New York Times firms rely on CMC’s data.
Naturally, this opened a can of worms. It definitely started a small Twitter feud between Binance Chief Executive Officer (CEO) Changpeng Zhao and Larry Cermak, the head analyst at The Block.
I tend to stay on the solutions side only.
Theblock seem to just attack exchanges with real volume one after another, while ignoring exchanges with fake volume, etc.
If you are in this industry, you should try to help it grow, not attack others who do.
— CZ Binance (@cz_binance) March 23, 2019
At the time, the latter had said, “Maybe you should more proactively speak against CoinMarketCap as the primary source of information for people looking at volumes. That seems to be the main issue.”
CZ had responded, “I tend to stay on the solutions side only. Theblock seem to just attack exchanges with real volume one after another, while ignoring exchanges with fake volume, etc. If you are in this industry, you should try to help it grow, not attack others who do.”
As this fire was raging, a Bloomberg reporter, Olga Kharif, spoke to CoinMarketcap’s Vice President, Carylyne Chan and received confirmation that the inaccuracies were concerning. Chan 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’.”
She added, “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.”
However, CoinMarketcap, to its credit alluded to the report and had said, “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. :)”
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