CryptoCompare Launches Crypto Exchange Benchmark Rankings

Amid rising concerns of wash trading, digital asset data provider CryptoCompare on Wednesday launched a crypto Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term benchmark to rank the exchanges.

Per the announcement, the benchmark will rank over 100 active global spot exchanges. The company believes that it will provide investors and traders with a comprehensive, granular, and reliable source of information on the best trading venues.

A much-needed ranking

CryptoCompare’s new product hits the market at a time when major exchanges are tainted with allegations of market manipulation through wash trading. Earlier this year, BitWise reported to the Securities and Exchange Commission (SEC) that 95 percent of the reported Bitcoin volumes by the crypto exchanges are fake.

“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,” the announcement noted.

To prepare the benchmark, the London-based company took into consideration both quantitative and qualitative factors, and instead of taking aggregate volume data, uses correlation-of-volume-to-Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term and standard-deviation-of-volume as inputs to more than 30 metrics.

Commenting on this new product, 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.”

The company already released its rankings for May, according to which, the top three most trusted crypto exchanges are Coinbase, Poloniex, and Bitstamp followed by bitFlyr, Liquid, itBit, Kraken, Binance, Gemini, and Bithumb.

The announcement also detailed that the ranking components include geography, legal and regulatory needs, investment, the reputation of the team and the company, data provision, trade surveillance, and market quality.

on Tuesday, Finance Magnates reported that CryptoCompare and Nasdaq tied up to launch an institution-focused crypto pricing product.