CoinMarketCap Receives Backlash After Excluding Data From Three Major South Korean Exchanges
CoinMarketCap has received backlash from their move to exclude three major South Korean exchanges from their data. The removal of data from Bithumb, Coinone and Korbit has caused the cryptocurrency total market cap to experience a sizable drop noted just before 5am. This has sparked anger among users who often use the site to see how the cryptocurrency universe is changing. The large, unannounced drop, frightened many and has brought CoinMarketCap under fire.
This news has surprised many and led to speculation on the possibilities of what prompted the change with no warning. The exchanges are all within the top 10 of cryptocurrencies exchanges by volume and without them, many are scared of losing the true pulse of the market. Users have expressed their anger due to the lack of announcement coming with this change. They argue that traders could have panicked thinking the market was actually falling and made trades they otherwise would not have.
The Twitter account associated with the site states the change was “due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity.” This would be logical as the exchanges have often traded at a premium compared to other markets such as GDAX and Binance with it being up to a $5,000 split. Despite the complaints seen towards this move, not everyone feels that it is a bad thing. The chief cryptographer of Ripple stated that he believed this would create a more accurate representation of the market.
While it may be best for CoinMarketCap to remove the exchanges, it handled the situation poorly. The large difference in prices posed possible issues in the future and despite these exchanges being popular, they were not always accurate of the true pricing of cryptos. Nevertheless, the change should have included an announcement so it would not incite panic like it did.