Here’s why cryptocurrencies are getting smoked on Monday

source
coinmarketcap

  • A data adjustment by CoinMarketCap caused cryptocurrency prices to drop on Monday.
  • The site removed South Korean exchanges from its site, which have been known to trade much higher than the rest of the world.

Prices of the world’s largest cryptocurrencies appeared to take some major hits on Monday morning after CoinMarketCap.com, arguably the most popular and important site for cryptocurrency pricing data, opted to remove South Korean exchanges from its data sources.

Cryptocurrencies have been known to trade at significant premiums in South Korea, often times many magnitudes higher than on other exchanges, due to localized demand and strict national controls on capital movement.

The move appears to have taken place just before 5 a.m. UTC (1 a.m. ET), when a steep, $35 billion drop in the total market cap of cryptocurrencies can be seen in CoinMarketCap’s data. Prices continued to drop in what could have been fear-induced sell offs, before the crypto universe’s market cap bottomed out at $668.7 billion.

Ripple has warned its customers to look at multiple data sources before making trading decisions after its XRP cryptocurrency fell from second- to third-largest by market cap because of the change.

“Coinmarketcap’s decision to exclude Korean prices from the displayed XRP price made the price appear to drop, likely triggering some panic selling,” Ripple’s chief cryptographer David Schwartz said on Twitter. “Look closely at the data and don’t be mislead.”

Korean prices have been outliers “due to a shortage of cryptos in Korea and difficulty getting KRW out,” Schwartz continued. “The new price is more accurate and meaningful.”

At one point overnight, XRP was trading at an average of $3.93 on South Korean exchanges – 38% above the token’s current price of $2.43, according to Markets Insider.

CoinMarketCap, which did not announce the change and did not respond to a request for comment, now shows 7,556 reporting markets for its 1,386 displayed cryptocurrencies on its website. The total market cap for cryptocurrencies was $726.7 billion at midday Monday.

XRP is down 11% over the last 24 hours, while bitcoin and ethereum are down 7% and 2%, respectively.