By
Chimamanda U. Martha
April 19th, 2024
CoinMarketCap has tweaked its crypto ranking metric seen as a move to empower users with the necessary tools for making informed decisions while selecting their trading platforms.
Crypto markets data aggregation has remained a tricky task and continues to remain so even for the world’s largest crypto data aggregator CoinMarketCap. As per the latest announcement, CoinMarketCap has introduced a new metric that ranks exchanges based on their web traffic.
Previously, crypto exchange rankings have been majorly derived based on trading volume and other activities. However, CMC’s new methodology comes just six months after it introduced its “liquidity metric” in November 2019.
In its announcement, CMC said that this development comes amidst its continued resolve to improves its measures. Besides, it stated that this new metric would help them address volume inflation in a much better way. CoinMarketCap has been one of the most widely-used platforms by investors and traders.
The Web Traffic Factor gives weightage to several factors like “pageviews, unique visitor count, bounce rate, time-on-site, relative ranking and keyword searches on major search engines”.
This will help users on the platform to make informed decisions on which exchanges to trade on. In its announcement, CMC wrote:
“Rather than wait for the perfect solution, our team has decided to take an iterative approach. We will be rolling out new metrics and improvements across multiple phases. This way, we can monitor how well each iteration addresses our users’ concerns, and adapt more optimally for the next iteration”.
Binance Takes Over CMC for Undisclosed Million Dollars
The latest decision from CMC comes just six weeks after it was acquired by crypto exchange Binance in early April. While the acquisition amount remains undisclosed, Binance has reportedly millions of dollars for this.
Interestingly, CoinMarketCap has flipped its position on the “web traffic” metric. Last year in a podcast interview, CMC’s Chief Strategy Officer and acting CEO Carylyne Chan called the web traffic metric as “not a good indicator”.
“We’ve seen other people do things like you’ve said, web traffic as a way [to verify exchanges are legitimate] but people trade using API keys so that’s why web traffic is not a good indicator,” she said.
However, in its latest blog post, CMC wrote:
“With crypto being a retail-driven market, for an exchange to have high volumes, it needs to have a large number of retail traders (i.e. buyers and sellers). Instead of asking exchanges to submit their user numbers, a good intermediate proxy will be web traffic. As such, we have designed the Web Traffic Factor in this iteration.”
Well, this move has helped Binance rank top on the list of CMC’s crypto exchanges. Based on the earlier liquidity metric, Binance’s rank for fourth in the list.