One of the go-to sources and platforms for monitoring cryptocurrency prices – CoinMarketCap – has caused a bit of uproar in the crypto market after it decided to exclude South Korean exchanges from its data of price average calculations. Yesterday, the cryptocurrency index took to its Twitter platform to announce that it has excluded three Korean exchanges – Bithumb, Coinone, and Korbit from their averages “due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity.”
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.
— CoinMarketCap (@CoinMarketCap) January 8, 2018
Yesterday, the home page of CoinMarketCap suggested a huge decline in it the cryptocurrency market where the overall valuations plunged by nearly 10% while the price of Ripple, which has been the most talked-after cryptocurrency in last two weeks, declined by nearly 30%.
Another cryptocurrency that was seen correcting significantly was Bitcoin derivative – Bitcoin Cash. Knowing the fact that the Korean exchanges have been major contributors, in terms of trading volumes, to the price moves in Bitcoin Cash, the correction seen was imminent.
The exact reason for pulling off the data has not been revealed by CoinMarketCap, and currently, at the press time the Bithumb website is showing the message that “The server is currently being checked.” Moreover, due to huge trading volumes being contributed by South Korean investors, its local exchanges have shown prices at a premium rate which is much higher than that shown by markets like GDAX and Bitfinex.
Ripple chief cryptographer David Schwartz appreciated this move by CoinMarketcap saying that the newly reflected price shows a “more accurate and meaningful” data.
They are outliers due to a shortage of cryptos in Korea and difficulty getting KRW out. The new price is more accurate and meaningful, IMO.
— David Schwartz (@JoelKatz) January 8, 2018
However, this sudden change in data by CoinMarketCap was not received well by the crypto community. Several comments on the popular social media platforms like Twitter and Reddit shows that many cryptocurrency enthusiasts are quite disappointed by the lack of any formal announcement before making this data change. Many traders say that they reacted to the change in the data which resulted in further decline in the prices which was perceived to be a heavily falling market.
The effect of the change in the prices of CoinMarketCap was reflected on other data website which showed a similar decline. As a result, a lot of investors were left totally confused as to in which direction the market was moving.