CoinMarketCap Excluded South Korean Exchanges, Brought Down Entire Cryptocurrency Market
January 9, 2018
Most cryptocurrency enthusiasts are well aware that the prices on CoinMarketCap.com are somewhat distorted. This is caused by the fact that the website had taken into account the prices from South Korean cryptocurrency exchanges to calculate the average rates. And as in the Asian region the cryptocurrency prices are way too high, it made the market look much larger than it actually was. Recently, the platform decided to exclude prices of cryptocurrencies on South Korean exchanges from the calculations. However, it will continue to count trading volumes taken from these exchanges.
This price difference became quite obvious when Bitcoin was trading at a price of $15,464 on the Western stock exchanges, while in Korea it was traded at $23,000. Obviously, this discrepancy between exchanges was a problem for quite some time. And, not having thought up anything better, CoinMarketCap has decided without any warning to exclude the prices from South Korean exchanges. No surprise that this led to a significant drop in the prices of the largest cryptocurrencies. That, in turn, caused panic on the market and a further drop in prices. However, by the end of the day, traders realized what was the matter, and the main altcoins began to recover their prices.
About a year ago, Chinese exchanges dominated the trading volume of Bitcoin and most of the altcoins. At that time, Chinese traders also paid a premium for each coin of about 10%. In South Korea, this premium is now close to an unthinkable 50 percent. However, due to the strict rules on these exchanges, the situation will not change in the near future.