Institutions Tune In To Crypto Data Tools
Trusted data sources could foster a culture of best practice.
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Accurate crypto data could help bring cryptocurrencies into the mainstream, according to the CEO of a prominent data provider.
Charles Hayter, CEO and co-founder of CryptoCompare, believes high-quality data may improve trust in the industry. “The price mechanism is the fundamental building block for any exchange,” he told Crypto Briefing.
Reliable metrics filter out bad actors or poor behaviour, he added, “allowing participants to trust the ecosystem and make accurate and effective decisions on what they’re buying, and how they’re buying it.”
CryptoCompare is on a tear this week, with three new integrations to provide traders with better insights into the digital asset market.
The company recently announced collaborations with both Nasdaq and BitMEX, which will develop institutional-grade data sets for more than 50,000 traders. It also unveiled a new exchange benchmark yesterday that will rank the top hundred spot exchanges, giving traders a comprehensive overview of the market landscape.
Crypto data can push mainstream adoption
“When it comes to trading, good decision-making depends on access to solid data insights,” explained BitMEX CEO Arthur Hayes, highlighting that institutional investors require quality market data to pursue sophisticated trading strategies.
CryptoCompare isn’t the only company to announce new data integrations. CryptoIndex, an index for the top hundred best-performing cryptocurrencies, announced an integration with Bloomberg and Reuters Terminals today.
CryptoIndex aggregates trade data along with announcements, spot price and other factors like social following and exchange listings. This allows the index to sift out coins with artificially inflated volumes or market caps.
According to CEO VJ Angelo, the index helps meet “growing demand for high-quality insight into the traditionally opaque and misunderstood area of cryptocurrency.”
The crypto industry suffered this year from reports that multiple exchanges were misreporting their trading volume to attract more traders to their platforms. Prominent exchanges, like Binance, have been at pains to demonstrate that their trading data is accurate and valid.
SEC Chairman Jay Clayton admitted to CNBC last week that market manipulation had been one of the key reasons the regulator had hesitated to approve a Bitcoin ETF application.
Quality data could have a cumulative effect on the cryptocurrency industry, Hayter says. Traders with a good understanding of the market are less likely to put themselves in harm’s way, taking pressure off authorities to push through potentially punitive regulation.
Another benefit is that better data might help integrate cryptocurrency into the wider financial market, by providing the tools for institutions to better understand the asset class.
“We need to start building these bridges into the main economy,” Hayter said. Industry figures, who understand the tech and appreciate its importance, have to shape its direction through better standards and more transparent operations.
Not only will quality data improve crypto’s reputation, Hayter emphasized, it could also facilitate greater institutional adoption.