CoinMarketCap (CMC) is easily the most well-known aggregate of crypto prices. It’s the closest thing the market has to an index and is frequently cited for up-to-date prices.
However overnight, CMC managed to crash the market. Not through trading or dodgy dealings, but simply because they altered the way they calculate their prices. The site removed several Korean exchanges from their pool. As explained by this tweet:
‘This morning we excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity. We are working on better tools to provide users with the averages that are most relevant to them.’
In other words, they took out what they saw as inflated prices. So naturally the entire crypto market took a massive hit. The timing couldn’t have been worse, as it exacerbated an already declining market.
Crypto price massacre
The result was another crypto price massacre. With red across the board as top coins dropped by 10, 20 or 30%.
It also created another rift in the crypto community. Some praised the move, while others labelled it as reporting false prices.
Ripple price was hit the hardest
Ripple — the coin that recently claimed the number two spot behind bitcoin — was one of the hardest hit. But the company’s chief cryptographer, David Schwartz was unfazed, noting…
‘The new price is more accurate and meaningful,’
Talk is cheap
The biggest criticism was the lack of transparency from CMC. The news didn’t break until after the renew calculations had been put in place. Leading some to accuse the site of market manipulation.
It’s yet another indicator that the industry still has a long way to go before it reaches maturity. And we can likely expect more of these teething problems to continue throughout the year.
Long-term though, if CMC’s move will address volatility even slightly then it’s definitely a good thing. The market is still desperately looking for some real stability. Hopefully they’ll let us know when they’re doing something similar next time…
After all, no one wants to be left in the dark. Which is why we think you need to know all there is about cryptos. It’s going to change the world, mark my words. Don’t miss out, discover the secret world of bitcoin today!
Junior Analyst, Money Morning