Crypto data provider Coinmarketcap has partnered with major exchanges to improve transparency in the crypto price landscape.
The new alliance has been dubbed the Data Accountability & Transparency Alliance (DATA). The group will discuss ways to improve cryptocurrency data reporting, making prices more accurate and transparent for users.
Led by Coinmarketcap, the alliance includes some of the biggest names in the crypto exchange space, including Binance, Bittrex, OKEx, Huobi, Liquid, Upbit, KuCoin, HitBTC Gate.io, OceanEx and Bitfinex.
Members of the alliance will provide “in-depth suggestions” on how to boost transparency in the crypto price reporting space. The team will meet twice per year at a roundtable event.
Coinmarketcap has already made concrete changes on behalf of the new alliance. The website now requires all exchanges on the platform to provide live trading data and live orderbook data. Any exchanges that fail to do so within 45 days will be removed from the platform’s adjusted volume calculations.
In other words, Coinmarketcap won’t just trust exchanges to report accurate information through their APIs by default. Coinmarketcap now requires direct access to live trading and live orderbook data.
Bitwise Report Indicates Coinmarketcap’s Data is Wrong
The news about DATA comes one month after a report from Bitwise Asset Management claimed that 95% of bitcoin exchange trading volume is fake. That report indicated that the true spot market for bitcoin essentially only existed on 10 different exchanges.
Shockingly, the Bitwise Asset Management report claims that average daily bitcoin trading volume is only around $273 million, compared to the $6 billion reported by Coinmarketcap.
Bitwise used this information to create BitcoinTradeVolume.com, which aims to inform users of the ‘real’ trading volume in the crypto space today.
As of May 1, BitcoinTradeVolume.com reports 24 hour bitcoin trading volume of $292 million. That trading volume is spread across ten major exchanges, including Binance, Coinbase, Kraken, Bitfinex, Bitstamp, bitFlyer, Gemini, Poloniex, Bittrex, and itBit.
The site also tracks bitcoin futures trading volume, which currently sits at $87 million per 24 hour period. $83 million of trading volume is on the CME Group futures exchange, while the remaining 4 million is on the CBOE’s bitcoin futures exchange.
Coinmarketcap Acknowledges the Need for Change
Based on the Bitwise report, Coinmarketcap decided to make changes to how it reports and analyzes crypto data:
“We recognize the need for evolving with the times, and want to continue … providing transparency and discovery for the long-tail of crypto assets,” said Coinmarketcap founder Brandon Chez.
In addition to forcing exchanges to be more transparent, Coinmarketcap is also launching its own block explorers for bitcoin and Ethereum. The goal is to help new users better understand how to interact with these blockchains.
Last month, Coinmarketcap rolled out its first Android app along with new updates for its iOS app. Today, the mobile apps feature portfolio tracking and candlestick charts, among other useful features.
More transparency for the crypto community is always a good thing. Exchanges are required to make Coinmarketcap’s changes within 45 days. We’ll see how many exchanges comply with the requirements – and how much Coinmarketcap’s reported trading volume changes after 45 days.