In the last 24 hours, $7 billion worth of bitcoin (BTC) was traded globally. That’s according to data provided by Coinmarketcap, the industry’s go-to aggregator of cryptocurrency data. Not everyone agrees with that figure however. “Honest Coinmarketcap” is a new project that aims to set the record straight and do away with inflated trade volumes.
Also read: Study Finds $3B Worth of Faked Cryptocurrency Volumes and Wash Trades
“Honest CMC” Alleges Massive Fake Volume
Allegations of wash trading and fake volume have dogged the cryptocurrency markets for years. If true, this behavior is not the fault of Coinmarketcap (CMC). But it is the duty of sites such as CMC to report data accurately, for their own reputation and for the sake of everyone in the cryptocurrency space. Due to the way it pulls its data from exchanges, exacerbated by the way these platforms record trading activity, Coinmarketcap has come in for criticism.
In an attempt to obtain a true picture of global cryptocurrency volume, Andrew Rennhack has created an alternative to CMC that he’s dubbed “Honest Coinmarketcap”. The project is rudimentary, and does not account for the many variables that can affect a coin’s trading volume. If its data is to be believed, however, cryptocurrency trading volumes have been massively overstated.
Trading Volumes Could Be Overstated by 80% or More
Clicking on the second tab in the Honest Coinmarketcap spreadsheet compares the listed and true volume for popular cryptocurrencies traded against various fiat currencies. It reports BTC and ETH’s volume as being 80% fake, with XRP and BCH faring slightly better at 43% and 70% respectively. Most other coins in the top 20 by market cap have fake volume of between 40% and 90%.
Although the data produced by Honest CMC should not be taken as gospel, its findings do tally with a previous report that claimed trading volume on some exchanges to be exaggerated by as much as 95%. Given Coinmarketcap’s dominance – the site now ranks among the world’s top 400 websites – it will continue to serve as the industry benchmark for trading data. Unless CMC changes the way it captures its raw data, trade volumes will remain unadjusted, no matter how inaccurate they may be.
Do you think trading volume is overstated and if so do you think it’s the obligation of Coinmarketcap to record this? Let us know in the comments section below.
Images courtesy of Shutterstock.
Need to calculate your bitcoin holdings? Check our tools section.
The post “Honest Coinmarketcap” Claims to Provide Accurate Cryptocurrency Data appeared first on Bitcoin News.