- Unique analysis reveals most trusted exchanges worldwide, based on granular trade and order book data rather than aggregate volumes; shows market share of low quality exchanges increased by 30% in the past year -
London, 12th June 2019 - 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.
The full report can be found here.
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.
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PR for CryptoCompare
CryptoCompare is the leading provider of cryptocurrency data and indices. Institutional and retail investors rely on the company for real-time, high-quality data spanning 5,900+ coins and 270,000+ currency pairs globally. By aggregating and analysing tick data from globally recognised exchanges and seamlessly integrating multiple datasets, CryptoCompare provides a comprehensive, granular overview of the market across cryptocurrency trade, order book, historical, social and blockchain data. CryptoCompare is at the forefront of industry efforts to provide definitive datasets that can be relied on to make investment decisions. The company adheres to rigorous standards to safeguard data integrity and promote confidence in the market. For more information, please visit https://www.cryptocompare.com.
Notes to editors
CryptoCompare’s Exchange Benchmark methodology utilises a combination of 34 qualitative and quantitative metrics to assign a grade to over 100 active spot exchanges. Each metric is converted into a series of points based on clearly defined criteria. Metrics were categorised into several buckets and distributed fairly to arrive at a final robust score, ensuring that no one metric overly influences the overall exchange ranking. Each exchange grade is derived from a broad due diligence check using qualitative data, followed by a market quality analysis that uses a combination of order book and transactional data.
Due diligence checks
Our due diligence checks comprise of six main categories designed to rate each exchange qualitatively on the basis of geography, legal/regulatory metrics, calibre of investment, team/company quality, quality of data provision, and trade surveillance.
We measure the market quality of each exchange using a combination of five metrics that aim to measure the cost to trade, liquidity, market stability, behaviour towards sentiment, and “natural” trading behaviour. Exchanges are rated based on a combination of nine of the most liquid BTC and ETH markets. Points are predominantly distributed using a rating system that compares each exchange with its peers for each metric, on each applicable market. We then arrive at an overall ranking across several markets for each exchange.