For a cryptocurrency investor or HODLer, it is important to track and analyze cryptocurrencies and keep a tab on the markets. I believe that CoinGecko is one of the most transparent and effective tools for tracking cryptocurrency prices and analyzing the cryptocurrency markets as we will see in the rest of this article.
What Is CoinGecko?
CoinGecko is a cryptocurrency data aggregator website that was launched six years ago in 2014.
Since then, CoinGecko has grown to become one of the earliest and largest cryptocurrency data aggregators in the industry.
The CoinGecko team is taking a more holistic approach to tracking cryptocurrencies prices and exchanges data.
CoinGecko currently (05/01/2020) tracks 7,184 different coins and tokens and 418 different cryptocurrency exchanges in the market.
With the goal of “increasing the crypto investors’ understanding of the fundamental factors driving the market,” the CoinGecko founders TM Lee and Bobby Ong wanted to find more transparent ways to track cryptocurrencies and market data.
“We believe that ‘market capitalization’ is not a very big measure of the value of a cryptocurrency because it is heavily manipulated.”
With thousands of coins and tokens on the market and new ones created almost every other day, the CoinGecko Team wants to help investors to better understand the data that’s shaping the market and the value of cryptocurrencies.
For this reason, the CoinGecko team is giving investors as many transparent and qualitative facts as possible regarding the various cryptocurrencies and exchanges in the market.
Coingecko: A Transparent Cryptocurrency Price Tracking and Market Data Analysis Tool
Rather than just tracking and measuring the value of cryptocurrencies simply by their market capitalization or rating exchanges by their trading volume, CoinGecko also tracks other important key metrics such as a project’s code progress and open-source code development, community growth, and other important events that affect its value.
CoinGecko Co-Founder Bobby Ong explains:
“We started out as a crypto data aggregator for developers and community metrics. For developer statistics, we track Github, Bitbucket, and Gitlab. We count the number of commits, added/deleted lines, stars, forks, and pull requests. For community statistics, we track Twitter followers, Facebook likes, Reddit subscribers, new posts and comments. We believe that by measuring community and developer statistics, we get a 360-degree view of certain cryptocurrencies.”
This is the first point that makes CoinGecko the most transparent and reliable tool for an in-depth analysis of cryptocurrencies and the crypto market as a whole.
The Problems Of Market Manipulation
Data and market manipulation is still an important issue in the industry. That`s why the trading volume itself is unreliable for the evaluation of cryptocurrency exchanges.
We are currently seeing a situation where almost cryptocurrency exchange data are heavily manipulated. Thus making it almost impossible for the average crypto investor reliable data that reflects the true situation of the market.
For example, when Bitwise Asset Management submitted its Bitcoin ETF proposal to the SEC last year, it included a study showing that 95% of trading volumes on cryptocurrency exchanges were fake.
Bitwise reached this conclusion after analyzing 81 exchanges over four days in March.
Shocking statistics like these show that the actual market for Bitcoin and other cryptocurrencies is much smaller than it appears.
Bobby Ong remarked:
“Fast forward to 2019, we came to a phase where cryptocurrency exchange data was heavily manipulated. In the regulated traditional markets, the volume reported by exchanges is very trustworthy, and a high volume indicates that there is more liquidity in the exchange. In unregulated crypto-markets, however, the reported exchange volumes are heavily manipulated.”
The CoinGecko Trust Score
When statistics such as these make the rounds, it is impossible to judge the liquidity of exchanges only based on their trading volume.
You also have to look at other metrics. Now, this is where CoinGecko comes in. The company recently launched a feature it calls the “Trust Score” to combat bogus trading volumes.
“Instead of sorting exchanges by ‘total reported 24-hour trading volume’, CoinGecko now sorts exchanges by Trust Score,” says Bobby Ong.
“This is a combination of normalized exchange volume with web traffic and order book analysis. The change came into effect on May 13, 2019 on the CoinGecko Exchange Overview and Coin pages”.
The CoinGecko Cryptocurrency Report
CoinGecko also produces quarterly reports on the state of the cryptocurrency industry.
These quarterly reports provide additional insights into key issues around the whole cryptocurrency industry.
You can get your own copy of the cryptocurrency report for free here on CoinGecko.
The current CoinGecko 2020 Q1 Cryptocurrency Report, for example, provides an overview of the current cryptocurrency market by highlighting the following topics:
- Market Dynamics (Spot)
- Crypto Derivatives
- Crypto Exchanges
- Traditional Markets
- Decentralized Finance (DeFi)
You should DeFinitely read the chapter about decentralized Finance.
In March 2020, CoinGecko published the world’s first Decentralized Finance (DeFi) book.
It contains an overview of the DeFi ecosystem with step-by-step guides in using the various popular DeFi apps.
CoinGecko also ran a Decentralized Finance (DeFi) survey from 19 – 29 March to members of the crypto community.
90% of those who have traded cryptocurrency recently are aware of DeFi.
54% of crypto users who are familiar with DeFi would go completely bankless.
Not trusting the banking system was cited as the main reason for the desire to go completely bankless.
My Final Thought On CoinGecko
The cryptocurrency industry is yet to be fully regulated. As a result, the problem of data manipulation and other shady market activities ain’t going away anytime soon.
I believe that CoinGecko is the most transparent and most accurate tool that provides you with trustworthy data to analyze and navigate the crypto market.
I hope I could provide you with some interesting and helpful information about CoinGecko.
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