CryptoCompare Offers API Access to Crypto Data and Analytics

Blog entry
By Uri Inspector, Staff Reporter
 
CryptoCompare’s release of API access to its cryptocurrency market data and analysis service is the latest step in its efforts to position itself as a traditional-style market data provider for the crypto space.

Founded in 2014, CryptoCompare seeks to establish itself as ‘the Thomson Reuters [now Refinitiv] or Bloomberg of crypto’, according to CEO Charles Hayter. The London-based company aims to offer institutional and retail investors a similar degree of transparency provided by data vendors in traditional financial markets.
 
“The new virtual world has made a huge profit and now the old world wants to get involved,” Hayter says. CryptoCompare essentially aims to bring the standards of old world investing to the new unstable one of crypto assets. The company’s platform has 14 million unique users per month, 5,000 of these being high-intensity users. CryptoCompare’s data is viewed between 20 and 180 million times per hour, peaking during times of higher market volatility.
 
CryptoCompare aggregates and normalises global data sources on more than 5,600 coins and 260,000 cryptocurrency pairs, providing a cross-market, holistic view of the highly fragmented cryptocurrency marketplace. The ultimate goal is to allow investors to identify specific buy and sell opportunities, expand their digital asset portfolios and make better investment decisions in the same way investors do in established markets.
 
The newly available API access to its data, introduced in response to customer demand for greater complexity and scalability, expands on CryptoCompare’s existing delivery options, which include distribution via Refinitiv and Yahoo Finance. The new API also extends the scope of historical data available to clients and supports clients’ custom market views. Using the API, customers can collect or cache CryptoCompare data locally for internal analysis.
 
The new service is available in three tiers, with each tier tailored to the contrasting needs of the institutional and retail investor, as well as third parties, partners and developers. Commercial redistribution rights are included in the tiered offering, giving third parties greater flexibility in leveraging CryptoCompare’s data to their own ends.
 
Those connecting through the API have access to trade data, order book data, blockchain and historical data as well as multiple cryptocurrency indices. CryptoCompare aggregates and analyses tick data from global exchanges, performing cluster analysis and measuring facets such as coin size, latency/throughput and liquidity flows between venues.
 
Additionally, data on crypto market happenings collected from social media allows CryptoCompare to ‘measure the pulse of the marketplace’, which can act as a leading indicator eventually driving sentiment analysis. Coupled with pricing data, this can be used to produce a relatively reliable valuation where little else is available.
 
CryptoCompare’s Aggregate Pricing Index (the CCCAGG) is used to calculate the best price estimation of cryptocurrency pairs traded across exchanges. It aggregates transactional data from more than 70 exchanges using a 24-hour volume-weighted average for every cryptocurrency pair.
 
Recent months have seen an upward trend in decentralised exchanges and fiat currency on-ramps, such  as Coinbase, where investors can trade in traditional currency for crypto before moving on to other crypto-only venues. Says Hayter: “There’s been a race in the past year of exchanges … offering fiat on-ramps to get access to non-fiat.” He adds, it is a ‘rapidly changing, highly fluid situation’, which is why it is continuously assessed via the firm’s valuations and reviews.
 
“We receive data in a wide variety of data formats,” Hayter says. “We normalise the data, sometimes adding what we receive provisionally to our platform then assessing it so as to avoid misinformation.” As well as volume, aggregate and market share assessments on new exchanges, CryptoCompare takes pricing data from venues and calculates volume weighted average price (VWAP) and crypto-to-US-dollar conversions. Outliers are habitually removed from the platform.
 
For investors, the firm's Monthly Exchange Reviews strengthen understanding of the trading landscape, offering news highlights, market segmentation, traffic analysis, exchange trade data and information on Bitcoin to Fiat volumes. The reviews also serve as a means of evaluating the integrity of exchange data used to calculate CCCAGG pricing across all pairs, and whether or not a venue meets CryptoCompare's standards of integrity to be included in its pricing indices.
 
In November 2018, CryptoCompare added two new exchanges: the China-based Catex and the Russian Exenium. By adding data from exchanges across the globe, CryptoCompare hopes to offer a holistic view of a cryptocurrency world that can often be destabilised by localised conditions. Hayter cites developments in South Korea over the past year, where investors were faced with the so-called ‘kimchi premium’, with cryptocurrencies being priced higher than anywhere else overseas, leading to arbitrage trading of up to 50%. This distorted the global cryptocurrency market, and without a holistic view across borders, traders could remain unaware of such realities.
 
This global focus is the reason why CryptoCompare also provides news and research on all wider issues concerning the crypto and blockchain space. This includes political developments and the macro-economic picture, with information on localised discrepancies in flows, and interactions between crypto futures and their underlying assets.
 
As well as continuously investing in technology, as seen in the roll out of the new API, the company takes a special interest in data methodology and data accuracy in Monthly Exchange Reviews and a yearly Taxonomy of Crypto Assets. The latter is a bottom-up analysis of hundreds of crypto assets, based on regulatory attributes, level of decentralisation, supply issuance, economic incentive, industrial classification and more. This ISIN-like (International Security Identification Number) methodology further suggests CryptoCompare is approaching the crypto space just as a data vendor would approach a traditional market.
 
According to the Taxonomy: “There is a clear requirement for a unified approach on how to categorise and treat these assets in order to make well informed investment decisions”. It gives investors a good grounding on individual coins, which currencies trade where and whether they are fungible. It is also useful for Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, allowing traders to fully trace cryptocurrencies.
 
In line with the Taxonomy, Hayter says CryptoCompare is working closely with CryptoUK – the trade association for the UK cryptocurrency industry, and Global Digital Finance – the industry body driving the acceleration and adoption of digital finance, to help promote greater understanding of the cryptocurrency world among regulators, industry and government stakeholders.