Platform CoinMarketCap has announced the launch of a new metric now captainvalor can assess the liquidity of trading platforms for digital assets. This became known today at the conference of the Capital, which was held in Singapore. It is assumed that CoinMarketCap will process data from more than 3000 different cryptocurrency exchanges.
Liquidity is a property of assets to be sold quickly at a price that is close to the market. If the asset is liquid, so it is easy to pay in money.
Liquidity is more important than volume
The liquidity of each exchange is calculated on the basis of a wide range of factors, including the size of trading orders and their location relative to average prices. The pair will observe at random intervals within a 24 hour period of time. The results of calculations for exchanges averaged and served in a sum in US dollars. To see metrics here.
In the case of cryptocurrency liquidity on the exchange is the ability to quickly sell coins without significant losses in price. The higher the liquidity provided CoinMarketCap table, the more likely that traders on the exchange will be able to buy even relatively large trade order for sale. That is, they will not face a shortage of coins.
Representatives CoinMarketCap said that the liquidity of the exchanges now will be given much more attention than their volumes. Trading volume itself is a very unreliable metric for exchanges, because it is easy to falsify. Enough to place a huge number of trade orders to create the imaginary activity at the site.
Related: Where to watch the courses of cryptocurrencies and the data on them? Alternative To CoinMarketCap.
The head of the strategic Department of CoinMarketCap Karelin Chan has promised that the service will struggle against fake information from exchanges.
When people pump up trading volumes, they mostly placed the same orders to buy and sell in the glass exchange [referring to a table of orders for the purchase and sale of coins — approx. editor], that is to buy and sell the cryptocurrency for themselves. We will resist it.
Complex method of calculation of liquidity, according to Chan, will give traders reliable information about the present condition of the exchange.
This is interesting: 95 percent of trade volumes — fake. How to distinguish the real deals from the fake?
New features CoinMarketCap already deduce some of the trading platforms to clean water. For example, here are the statistics of trades in the last 24 hours. The first largest is exchange CoinBene. It would seem that her traders were most active during these hours.
But the new metric shows completely different data — first place in liquidity took Binance, which is more similar to the reality.
Innovation CoinMarketCap may seem insignificant, but it is not so. The liquidity of the exchanges will show a more accurate picture of trading cryptocurrencies and in theory may even eliminate the practice of adding trading volumes. And this, in turn, will make this type of assets more transparent and attractive to investors. Something similar happened after the rejection of the first ever BitcoinETF. Read more about it in this article.
Real reviews about the most popular kryptomere can be found in our chat of cryptomerioides. Also don’t forget to follow us on Yandex Zen.
SUBSCRIBE TO OUR CHANNEL IN THE TELEGRAM. WE HAVE ONLY THE MOST RELIABLE NEWS ABOUT THE CRYPT!