CryptoCompare, the leading provider of cryptocurrency data and indices, today launched its first cryptocurrency Exchange Benchmark. The new product ranks over 100 active spot exchanges globally, offering investors and traders a comprehensive, granular and reliable source of information on the best trading venues.
Over the past year, a growing body of research has found that a significant number of cryptoasset exchanges are wash trading and using incentivised trading schemes to inflate volumes. The CryptoCompare Exchange Benchmark shows the problem has been getting worse with lower quality exchanges (ranked C-F1) increasing market share by 30% in the last 12 months, demonstrating the need for a ranking methodology that does not rely on aggregate volumes.
CryptoCompare’s inaugural Exchange Benchmark product was launched in response to industry demand for reliable metrics to evaluate the vast number of cryptocurrency exchanges globally. 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.
The analysis, based on exchange data for the period 1st-31st May 2019, reveals the most trusted exchanges to be: (1) Coinbase; (2) Poloniex; (3) Bitstamp; (4) bitFlyer; (5) Liquid; (6) itBit; (7) Kraken; (8) Binance; (9) Gemini; (10) Bithumb.
Charles Hayter, Co-Founder and CEO of CryptoCompare, said:
“In response to industry concerns over inflated volumes and the lack of reliable metrics for assessing cryptocurrency exchanges, we are excited to launch the CryptoCompare Exchange Benchmark. 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.”
Gabor Gurbacs, Director, Digital Asset Strategy at VanEck, said:
“We are excited to have been working with CryptoCompare to provide greater transparency to the digital asset investment space via providing high quality data and indices. This is a breakthrough report that will foster transparency and support operational, regulatory and business best practices among crypto trading platforms. We believe that many trading platforms have already made a lot of progress in meeting regulatory concerns regarding money laundering and manipulative trading practices via surveillance and market standard operational and business improvements.”
The ranking components include: geography; legal/regulatory; investment; team/company; data provision; trade surveillance; and market quality. Analysis is based on public information, and detailed methodology is made freely available, underlining CryptoCompare’s commitment to bringing greater transparency to the cryptocurrency marketplace..
CryptoCompare provides a comprehensive, granular and reliable overview of the cryptocurrency markets. The company’s datasets - spanning cryptocurrency trade, order book, historical, social and blockchain data - are the most granular in the industry and include historical data since 2013. CryptoCompare aggregates and analyses tick data from more than 150 globally recognised exchanges, and regularly reviews these to ensure data integrity.
The company also offers a family of cryptocurrency indices, white-labelled indices and bespoke data products. The Exchange Benchmark will feed into CryptoCompare’s aggregate indices to create reference rates for the top tier exchanges, establishing a new, trustworthy dataset.
1Grading from high to low: AA, A, B, C, D, E, F - based on total cumulative score in comparison to the entire pool of exchanges in the ranking.