By
Chimamanda U. Martha
April 25th, 2024
CoinMarketCap has made its first-ever acquisition. The company acquired is Hashtag Capital, a startup involved in developing algorithms that analyze ‘all points of available liquidity’ to more accurately reflect an asset.
CoinMarketCap, the cryptocurrency market data provider, has made its first-ever acquisition. The company acquired is Hashtag Capital, a startup involved in developing algorithms that analyze ‘all points of available liquidity’ with a view to more accurately reflect an asset.
According to the press release, Hashtag Capital has already developed a set of algorithms for determining ‘true price’ of cryptos, and after the acquisition, the team behind the company will join CoinMarketCap and continue developing pricing algorithms and improving data offerings.
Brandon Chez, CEO of CoinMarketCap, said:
“We are excited to push the envelope on cryptocurrency pricing at CoinMarketCap, going beyond our traditional volume-weighted average prices to even more sophisticated price algorithms and analyses. The Hashtag Capital team will be able to add significantly to our data efforts, and drive the next phase of CoinMarketCap in providing data products to the market.”
Initially, Hashtag Capital was an absolute returns crypto trading fund, then it started to work on improving the quality of markets’ data. The startup’s team includes Yangbin ‘Wybe’ Kwok, the co-founder of Zopim, Jeremy Seow, who was the Product Manager for Zendesk Chat, and a Venture Partner at ChainRock, and Spencer Yang who previously was a member of international expansion teams of Cobo, CryptoKitties and Unikrn.
CoinMarketCap’s Accurate Pricing Approach
According to CoinMarketCap, they determine the price of each crypto using a ‘volume-weighted average price’ (VWAP) which essentially assigns a weight based on the volume of the contributing exchange to the cryptocurrency. CoinMarketCap is focused on providing as many data sources as possible so that the global price averages are very accurate.
The press release reads:
“It has always been in our philosophy to provide as much visibility and breadth in our coverage of the crypto market, instead of selecting some exchanges and ignoring other relevant points of liquidity. We believe that this view will continue to drive greater accuracy in the data, as inclusion of all sources of data will create an exhaustive view of global liquidity.”
In May, CoinMarketCap formed Data Accountability and Transparency Alliance (DATA) joined by Binance, Bittrex, OKEx, Huobi, Liquid, UpBit, IDEX, OceanEX, Gate.io, KuCoin, HitBTCand Bitfinex. The alliance aims to promote greater transparency, accountability, and disclosure from projects in the crypto space. Moreover, CoinMarketCap required that all exchanges listed on its platform must provide live trading data and live order book data.
With Hashtag Capital, CoinMarketCap will enhance the effort on DATA.
Carylyne Chan, Chief Strategy Officer at CoinMarketCap, stated:
“We are really excited about the future progress at CoinMarketCap! With the new data efforts we will be launching, in addition to our DATA Alliance, we will be able to provide a truly comprehensive platform for our users and customers, and pave the way for continued industry-wide involvement in crypto data development.”
In the highly volatile world of cryptos, it is time to continue evolving and improving price index methodology. With such a view, CoinMarketCap is sure that their focus on accuracy and all-inclusion will drive greater transparency and precision in cryptocurrency price discovery.