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CoinMarketCap is in a tough position here. I can obviously understand not wanting to list massive outliers in an average, but at the same time there isn't real

CoinMarketCap is in a tough position here. I can obviously understand not wanting to list massive outliers in an average, but at the same time there isn't realistically a way for them to "safely" adjust which exchanges they include in the averages. No matter what, it's either going to cause big sudden jumps in either direction, or they can "smear" it across some time, which (in my opinion) would look really bad as it would imply sustained increase or decrease. Giving advance notice should be expected of them, but I honestly don't know if they gave one or not, and I don't really think that many people would have read it if they did.

agotterer 9y ago
I visit CoinMarketCap every single day and I don't recall ever seeing a notice or message about a change to the exchange listing.
- Klathmon 9y ago
  Yeah that's really the only thing I can fault them on here. They really should have given some advanced notice that they would be changing how they calculate the averages. Especially since they have a widely used API that many people use, and I'm assuming some trading bots as well.
  - tomkarlo 9y ago
    The problem with giving advance notice is the impact would just be felt at the time of the notice (bc smart traders will just determine the adjustment immediately.) I think the suggestion above to make the change immediate, but re-calc the historicals so the % change is still right, is probably not bad.
- mancerayder 9y ago
  Which isn't good PR given that all the related press (including non crypto currency specific stuff like Bloomberg). https://www.bloomberg.com/news/articles/2018-01-08/bitcoin-resumes-drop-as-asian-regulation-demand-concerns-linger https://www.bloomberg.com/news/articles/2018-01-08/bitcoin-r...
retube 9y ago
> but at the same time there isn't realistically a way for them to "safely" adjust which exchanges they include in the averages. this is a very solved problem in financial markets: you source quotes from a set list of contributors, ditch a set number of the highs and lows and average rest, possibly weighted in some way, e.g trade volume.
- twinkletwinkle 9y ago
  Oh, like LIBOR! That's always worked perfectly, hasn't it?
  - retube 9y ago
    Well actually, yes, pretty much. No trader actually succeeded in meaningfully moving the fix, precisely due to this mechanism - except for 1 guy - Tom Hayes, probably the best known of the Libor guys (the other guys were done for attempting to move the fix, not actually moving it) Tom knew full well that it was impossible for a single guy to move the fix - go too high or too low and your submission gets chucked out. In the range, as 1 of 12 others, you aren't going to have a meaningful impact. The only way of moving it is to get all submitters (or at least lots of them) to submit high or low fixes in your favour. But a cartel like that is never going to work: 1) It means revealing your positions to your trading counterparties and competitirs - not good 2) Others could be the other way round to you, and want to submit fixes against you 3) Even in those heady days of loose standards, setting up and running a cartel would be logistically tricky So - what to do? Well Tom had a great insight. he realised that athe interbank lending market was pretty illiquid and there was wasn't much mush actual trading to reference. Most banks were submitting "best guesses" and those guesses were based on broker screens like ICAP. The rationale was that ICAP saw all the flows, so ICAP know the levels, so it was reasonalble to base your submission on the ICAP screens (ICAP screens are used as a reference in all sorts of markets, they are the gold standard). Now Tom also raelised that ICAP weren't seeing much flow either and that their prices weren't much better than guestimates. So - he basically bribed a couple of brokers at ICAP to bump the screens. And that way he'd effectively bump the whole market as everyone was basing their prices on them! (He bribed the ICAP guys by executing "wash" trades, back-to-backs, that have no economic rationale, but generate brokerage fees). So, in short, yes the top & tailing averaging approach is pretty robust. But of course no system is completely infallible.
jerkstate 9y ago
IMO the problem was not adjusting the dollar value, but the fact that they did not regenerate the past week's data in the sparkline. So the weekly price graphs showed a sharp drop in many coins that didn't actually happen. They should have regenerated the graphs (they also should have posted an announcement on their site)

agotterer 9y ago

I visit CoinMarketCap every single day and I don't recall ever seeing a notice or message about a change to the exchange listing.

Klathmon 9y ago
Yeah that's really the only thing I can fault them on here. They really should have given some advanced notice that they would be changing how they calculate the averages. Especially since they have a widely used API that many people use, and I'm assuming some trading bots as well.
- tomkarlo 9y ago
  The problem with giving advance notice is the impact would just be felt at the time of the notice (bc smart traders will just determine the adjustment immediately.) I think the suggestion above to make the change immediate, but re-calc the historicals so the % change is still right, is probably not bad.
mancerayder 9y ago
Which isn't good PR given that all the related press (including non crypto currency specific stuff like Bloomberg). https://www.bloomberg.com/news/articles/2018-01-08/bitcoin-resumes-drop-as-asian-regulation-demand-concerns-linger https://www.bloomberg.com/news/articles/2018-01-08/bitcoin-r...

retube 9y ago

> but at the same time there isn't realistically a way for them to "safely" adjust which exchanges they include in the averages. this is a very solved problem in financial markets: you source quotes from a set list of contributors, ditch a set number of the highs and lows and average rest, possibly weighted in some way, e.g trade volume.

twinkletwinkle 9y ago
Oh, like LIBOR! That's always worked perfectly, hasn't it?
- retube 9y ago
  Well actually, yes, pretty much. No trader actually succeeded in meaningfully moving the fix, precisely due to this mechanism - except for 1 guy - Tom Hayes, probably the best known of the Libor guys (the other guys were done for attempting to move the fix, not actually moving it) Tom knew full well that it was impossible for a single guy to move the fix - go too high or too low and your submission gets chucked out. In the range, as 1 of 12 others, you aren't going to have a meaningful impact. The only way of moving it is to get all submitters (or at least lots of them) to submit high or low fixes in your favour. But a cartel like that is never going to work: 1) It means revealing your positions to your trading counterparties and competitirs - not good 2) Others could be the other way round to you, and want to submit fixes against you 3) Even in those heady days of loose standards, setting up and running a cartel would be logistically tricky So - what to do? Well Tom had a great insight. he realised that athe interbank lending market was pretty illiquid and there was wasn't much mush actual trading to reference. Most banks were submitting "best guesses" and those guesses were based on broker screens like ICAP. The rationale was that ICAP saw all the flows, so ICAP know the levels, so it was reasonalble to base your submission on the ICAP screens (ICAP screens are used as a reference in all sorts of markets, they are the gold standard). Now Tom also raelised that ICAP weren't seeing much flow either and that their prices weren't much better than guestimates. So - he basically bribed a couple of brokers at ICAP to bump the screens. And that way he'd effectively bump the whole market as everyone was basing their prices on them! (He bribed the ICAP guys by executing "wash" trades, back-to-backs, that have no economic rationale, but generate brokerage fees). So, in short, yes the top & tailing averaging approach is pretty robust. But of course no system is completely infallible.

jerkstate 9y ago

IMO the problem was not adjusting the dollar value, but the fact that they did not regenerate the past week's data in the sparkline. So the weekly price graphs showed a sharp drop in many coins that didn't actually happen. They should have regenerated the graphs (they also should have posted an announcement on their site)