CoinMarketCap Finally Changing Ranking Methodology

August 31, 2019 3:59 PM UTC

CoinMarketCap is the most popular ranking website for cryptocurrencies. CMC shows the basic info of tokens and coins as well as the trading volume, price, Market Cap and other statistics.

Getting listed on CMC will grant a cryptocurrency project some sort of trust just like when they get listed on big exchanges.

Crypto users, however, have been complaining about the way Market Cap is calculated. Market Cap is a metric that uses a simple calculation, it multiplies the circulating supply of a cryptocurrency by its current price. Top cryptocurrencies will usually have enough volume to prevent obvious manipulation, however, smaller cryptocurrencies can easily be manipulated.

There are thousands of cryptocurrencies with volumes lower than $100,000 which means someone can easily manipulate the price and therefore, manipulate the Market Cap. You probably have seen unknown coins making it top the top of the Market Cap ranking because someone has manipulated the price.

Volumes can also be heavily manipulated with the use of wash trading, in fact recent studies have shown that the majority of the total crypto volume is fabricated.

In a recent blog CMC has announced that they will be addressing the issue with inflated volume as well as using a new ranking system.

As unveiled during our first DATA roundtable, we will be releasing new metrics based on liquidity to address the current concerns around inflated volumes.

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