Bitfinex’s Bitcoin Price Removed From CoinMarketCap’s Calculation
CoinMarketCap now features at its BTC/USD data a single asterisk mark for Bitfinex’s price, which means that the price of BTC from that exchange is excluded from the calculations.
Last month, Bitfinex was sued by the New York Attorney General for hiding the fact that it lost $850 million worth of funds and tried covering the missing sum with Tether reserves. Bitfinex subsequently had claimed that the funds had been “seized” by US authorities and that it was working to get back the funds.
Due to this legal matter, holders have been dumping their Tether holdings on Bitfinex, which inflated Bitcoin (BTC) with a $300 premium on Bitfinex. While BTC is traded in average at a price of $5,900 on other exchanges, the coin’s price on Bitfinex is $6,225.
CoinMarketCap states the conditions of such exclusions on its website, explaining that:
“The price of any cryptocurrency is a volume weighted average of market pair prices (1) for the cryptocurrency. … Some prices are manually excluded from the average, denoted by an asterisk (*) on the markets tab if the price does not seem indicative of a free market price; for example, when an exchange disables withdrawals or deposits, or regulatory conditions make it impossible for anyone else outside of a certain geographical region to buy coins. Some prices are also automatically excluded when our algorithms detect that the reported price is a significant outlier when compared to other market pairs for the same cryptocurrency, denoted by three asterisks (***) on the markets tab.”
Bitfinex recently launched an initial exchange offering (IEO) in order to raise $1 billion via token sale to cover for the lost funds. Although an official white paper regarding the offering has not yet been published, Bitfinex shareholder Zhao Dong has stated that there are investors that have pre-ordered their buy in the sale.
CoinMarketCap previously altered the way Bitfinex data was used on their site after a CoinDesk report showed that a trading pair featured on CoinMarketCap –Tether (USDT) and U.S. dollars – was not actually available on Bitfinex. As a result, the platform removed the pair from its volume data.
Last week, the crypto data platform established the Data Accountability & Transparency Alliance (DATA), which consisted of several exchanges that surprisingly included Bitfinex, with the purpose of challenging concerns over cryptocurrency data reporting.
Featured Image: Cryptocurrency News