CoinMarketCap dyes red after eliminating South Korean exchange houses from its indexes
CoinMarketCap.com has excluded from its analysis the prices of some South Korean exchange houses. This reflected a decrease in the value of a good part of the cryptoactives in the site without an apparent cause for it, thus causing a massive sale that brought down the entire market.
Today, the website considered one of the main references worldwide to know the capitalization in the cryptocurrency market of each digital asset, CoinMarketCap, decided to stop taking into account the value of the cryptoactives reflected by some of the Exchange houses of South Korea. Measure that was taken "due to the extreme divergence in prices compared to the rest of the world and the limited opportunity for arbitration" as explained by the platform through the social network Twitter:
When you see the statistics of the page on the volume of transactions of bitcoin, you can see that Bithumb (the second largest exchange house in the world according to its volume of exchange) has a distinction with the rest of the listed platforms.
As seen in the image, the price of bitcoin in the South Korean Bithumb exchange house (besides being the highest) has an asterisk on one side, which for CoinMarketCap purposes implies that its price is excluded from its analysis; as can be seen in the legend of the following image, which also shows how all the cryptoactive agents listed in Bithumb have the same brand.
The biggest problem with the action taken by CoinMarketCap was not the exclusion per se, since the reasons given are justifiable. Especially if we take a new look at the comparative image of bitcoin prices between the different exchange houses and Bithumb, where you can see the wide margin between its price (Bithumb: $ 21,552) and the second highest (BTCC: $ 15,200) ).
The most damaging was the way they made that modification. Since, by not warning its visitors about it, the reaction that was generated in the community was panic. When seeing the prices in red of so many cryptocurrencies, many holders of these began to sell them to cut losses; which in turn caused a true generalized fall of the market.
Bithumb has been the one that has been used mostly as an example in this article due to its impressive position in the world market, it was not the only South Korean exchange house affected by this decision of CoinMarketCap. Coinone and Korbit have also been excluded from the analysis conducted by the site to determine the market capitalization of each cryptoactive.
Recall that South Korea, after the instability created by the Chinese government in terms of the exchange of cryptocurrencies, became the global epicenter of both the ups and downs of prices in this market. Only Bithumb has a daily volume that averages $ 2.6 billion.
In fact, one of the most outstanding cryptocoins recently due to the rally that he experienced closing 2017, Ripple (XRP) was also one of the most affected by this move of CoinMarketCap. At the time of writing this article reflects a 26.13% drop in this website and in CoinGecko. However, on other similar pages such as CryptoCompare and LiveCoinWatch, the XRP drop is much lower than 20%.
Despite the misunderstanding and alarmist reaction of many investors in the ecosystem, the global crypto-active market seems to be recovering little by little throughout the day, as it can be seen how it went from being at $ 712 billion at the beginning of the day when it happened the fall to be above the $ 726 billion at midday today.