Trading Volume Figures of Only 13 Crypto Exchanges Credible: Coin Metrics Report
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Trading Volume Figures of Only 13 Crypto Exchanges Credible: Coin Metrics Report

July 29, 2020      Sandeep Kumar Mishra

A new framework for the analysis of the reliability of volume data of cryptocurrency exchanges developed by the crypto analytics firm, Coin Metrics, has revealed that the trading volume figures of only 13 cryptocurrency exchanges are reliable. According to the firm, the actual trading volumes are just about one-tenth for most of the exchanges.

Data Falsification by Exchanges

Most exchanges, especially the ones that list illiquid altcoins, are notorious for boosting volumes through data falsification. According to a Coin Metrics data scientist Jon Geenty, they apparently do this to attract traders to their platform and improve their ranking.

How Does the Framework Work?

Coin Metric’s new framework, instead of aggregating trading volumes from the most popular crypto exchanges, funnels data from 13 trusted spot exchanges, which include-

  1. Binance
  2. Bitbank
  3. Bitfinex
  4. bitFlyer
  5. Bitstamp
  6. Bittrex
  7. CEX.IO
  8. Coinbase
  9. Gate.io
  10. Gemini
  11. iBit
  12. Kraken
  13. Poloniex
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The Coin Metrics framework subjected the exchanges to a three-pronged litmus test for volume correlation, web traffic analytics, and qualitative features.

The first metric measured the correlation between an exchange’s price feeds with the price feeds from well-regulated crypto exchanges like Kraken, Gemini, and Bitstamp. Only exchanges with at least 80% correlation passed this test.

The second metric cross-checked the exchange’s reported volume with its daily web traffic with the view that the inflating volume numbers of an exchange tend to have a higher ratio of volume compared to other exchanges.

The third Coin Metric test analyzed the exchange’s qualitative measures in its features, which included its KYC requirements, regulation status, fiat deposits enabled, and data availability. Only exchanges that scored at least 50 out of 89 passed this test.

So, Which Are the Least Trustworthy Exchanges?

Only one exchange i.e. Malta-based OKEx failed all the three categories. However, other exchanges like BiBox, HitBTC, LBank, and ZB.com also failed in two of Coin Metrics tests.

#Binance #BItbank #Bitfinex #BitFlyer #Bitstamp #Bittrex #Cex.io #Coin Metrics #Coinbase #Gemini #IBit #Kraken #Okex
Sandeep Kumar Mishra
Sandeep Kumar Mishra

Sandeep is an avid cryptocurrency enthusiast and a keen & passionate blogger. He has a strong mix of skills in the areas of computer networking, cryptography, algorithms, and data structures and specializes in ERC20 tokens. Lately, he is taking a lot of interest in blockchain-powered AI solutions, about which he is also reading and writing extensively. He has to his name dozens of deeply researched articles about cryptocurrencies, blockchain, AI, and IoT. Apart from that, he loves to keep track of the latest trends in social media and digital marketing space. Also, as a huge proponent of blockchain and cryptocurrencies, Sandeep tries to deliver all the latest cryptocurrency news to ardent crypto supporters like yourselves. If you like his content, feel free to follow him on LinkedIn.