Understanding CoinMarketCap.com: Leading Crypto Market Cap Site
Every crypto enthusiast has heard of the website, CoinMarketCap.com, which is the number 1 website in the cryptocurrency space. For years now, the site has provided useful information for enthusiasts and investors alike. The website tracks most of the alternative coins that have hit the market and also shows users the current value in dollars and Bitcoins for each currency.
However, recent times have seen scandalous allegations surround the prominent site, and many are left wondering if CoinMarketCap can still be trusted. In this article, we will take a look at the site and the various scandals surrounding it. Hopefully, the insightful information will provide a starting point for you to decide whether or not CoinMarketCap is trustworthy.
What is CoinMarketCap.com?
CoinMarketCap provides all the crypto information that you would need. The site shows the number of coins that are currently in circulation, the change in value over the last 24 hours in percentage, the volume being traded the previous 24 hours, and the market cap, which is the total value of the specific coins that are in circulation.
CoinMarketCap updates its information regularly using feeds from different cryptocurrency exchange sites as well as from the crypto coins entrepreneurs. This data helps keep the numbers as close as possible to the correct figures at all times. The platform allows users to view the movement of the price of a coin in the market graph. It shows you the last seven days’ progress of currency and whether it is losing or gaining value. CoinMarketCap arranges the coins in order of the total market cap and not by the ability to grow in value or the value of each coin. So, the top coins don’t always represent which currency is currently increasing in value the most.
What is CoinMarketCap For?
When investing in a cryptocurrency, some of the most important things to know is the market cap, volume (fiat value of currency traded in a day), price, social media buzz, and the different exchanges the coin trades on. CoinMarketCap provides all that information, and that is why it’s arguably the most popular cryptocurrency-related site.
CoinMarketCap does not allow for the exchange of coins. Instead, it’s just a great tool to use together with other places of information to help you follow the market trends quickly and make a profit from your invested coins.
Alleged CoinMarketCap Manipulation of the Crypto Market
According to people familiar with the matter, CMC can drive a significant amount of web traffic, which is the main reason for Binance’s interest. But Lary Cenmark said via a Tweet, that CMC already doesn’t have a good reputation among the crypto community. Many new organizations, trading outlets, companies, informational sites, and users use the website frequently for reference points. In short, it has over 125 million people relying on its data as a reference price and a trusted source of information on cryptocurrencies.
CoinMarketCap refuses to update the data of some coins even after the efforts of contacting their support team with up to date and correct information. Their negligence has affected many currencies, with a lot of them giving up trying to get CMC to put the accurate data in their sites.
CoinMarketCap is also believed to be conducting massive insider trading with the employees, owners, and others involved with the site. According to research from multiple coin creators, it shows unusual buying of coins between times that the coin creators asked CMC to list their coin (through their google form) and between when it gets listed on the site. This frequently occurs especially when analyzing the action on coins when being listed, which could mean that CMC insiders know that individual coins will pump, thus buying hurriedly to beat the listing of the currency.
Also, the CMC team is actively allowing and managing pumps and dumps without the knowledge of the coin creators or coin communities themselves, which is evident by the direct manipulation of the circulating supply of some coins. To be precise, CMC increases the market cap by putting the circulating amount as very low at specific points, then lowering the market cap by dropping it down to a much smaller number later. Coins on CMC start to move up and down their numbered list, causing massive buys and sell-offs. However, the public outcry from the coin community usually puts an end to this fraud; thus can only be made to happen maybe once or twice with each coin.
CoinMarketCap also kills off coins as it sees fit by removing its circulation supply to a meager number randomly, and keeps it there for a prolonged period. Daily volume on the currency dies off as the coins go lower and lower in the rankings till it reaches zero. Finally, the coin is delisted on exchanges. On the flip side, CMC claims some coins lose their circulating supply due to faults of the coins, although many fail even with the objections and outcry of the coin creators and communities backing them.
Adding to the number of concerns is the outdated/incorrect information of many of the coins listed on CMC, the possible bribery of CMC officials, and other despicable behaviors that could very obviously be concluded from their current actions. Competitors would pay CMC officials to make sure the other would have a lower market cap by refusing to update the circulating supply of what the real numbers are and instead show a random amount of their choosing. This is evident in a number of the coins listed on CMC. It is in the best interest of the entire community to try and combat these issues until such a time that CoinMarketCap updated their site to show the correct information.
Recent Binance Acquisition
Binance was launched in 2017 and has grown to be quite large since then. Changpeng Zhao CZ and Yi He founded the popular cryptocurrency exchange. A year after its launch, Binance was considered the largest in terms of cryptocurrency trading volume. Over time, Binance has acquired the Beijing-based Dappreview, the Indian exchange Wazirx, a derivatives exchange called JEX, a digital currency mobile wallet branch called Trust Wallet and Mars Finance.
Recently, Binance announced the acquisition of CoinMarketCap for $400 million. This deal could be one of the most significant procurements in the cryptocurrency and blockchain industry to-date. Also, according to Alexa ratings, CMC is ranked 570 worldwide and 819 in the United States with a lot of traffic coming from countries like the U.S, India, and Brazil. However, several people do not trust the data from the CoinMarketCap site following the recent allegations.
Well, that wraps up on CoinMarketCap. Although the site was once trusted by many in the crypto community, most people don’t feel like it is a credible source of information now. It is, therefore, upon the community to make sure that resources are not being placed in positions to commit fraud like this ever again freely or another website is promoted that provides correct and up-to-date data. CoinMarketCap has had its share of fraudulent scams, so before investing in any specific coin, make sure to do proper research to be on the safe side.