(BlockBar) CryptoCompare, the cryptocurrency data and indices provider has been working to make it easier to spot good, and bad crypto exchanges. By offering users a “comprehensive, granular and reliable source of information on the best trading venues,” it has launched a benchmark ranking of over 100 active spot exchanges from across the globe. The Exchange Benchmark of the company was launched to address the need for reliable metrics to evaluate the large number of cryptocurrency exchanges.
The firm explains, “Employing both a qualitative (due diligence) and quantitative (market quality based on order book and trade data) approach, the product does not hinge on aggregate volume data but, rather, uses correlation of volume to volatility and standard-deviation-of-volume as inputs to CryptoCompare’s 30+ metrics. This is due to existing issues with volume manipulation, wash trading and trading incentives.”
Based on exchange data for the period May 1–31, the first analysis suggests the most trusted three exchanges are Coinbase, Poloniex and Bitstamp in descending order of ranking. BitFlyer, Liquid, itBit, Kraken, Binance, Gemini and Bithumb complete the top 10, in descending order only. The ranking components include: investment, data provision, geography, legal and regulatory, team and company, trade surveillance, and market quality. To be noted, the methodology has been explained in a report.
In the research CryptoCompare indicates that to inflate volumes, many exchanges are wash trading and using incentivised trading schemes. CryptoCompare says market share increased by 30 percent in the last 12 months even with lower quality exchanges (ranked C-F1). Co-founder and CEO of CryptoCompare, Charles Hayter said, “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.”
Bitwise Asset Management has also published a list of the 10 exchanges recently. According to its March report, it found that around 95 percent of volume is being faked. It also said that the real spot market for bitcoin essentially exists on 10 exchanges conducting nearly $300 million in daily trading volume. The Exchange Benchmark will be fed into its aggregate indices to create reference rates for the top exchanges, according to CryptoCompare.
John Danie is a highly experienced marketing strategist and businessman in the blockchain industry who likes the pace of the development of cryptocurrency, especially in blockchain technology where it can move so fast. Being a fintech writer and crypto reporter with a fascination for tech and a passion for starting interesting conversations, he seeks to create authentic news stories in the industry.