(Bloomberg) — The finger-pointing has already started after data glitches resulted in the brief display of astronomical gains for many cryptocurrencies at CoinMarketCap.com and Coinbase Global Inc. late Tuesday.
Crypto.com Chief Executive Officer Kris Marszalek blamed data provider CoinMarketCap.com’s price feed for the inflated prices displayed within the crypto exchange’s app. Trading activity wasn’t affected, he said in a tweet, but the company is “working on removing @CoinMarketCap’s unreliable price feed” from its product.
CoinMarketCap is owned by Binance, the world’s biggest crypto exchange.
While the exact cause of the glitches is still unclear, some industry members point to the possible role of API, or application programming interface. Web siteWeb sites use APIs to talk to each other, and a website can make its APIs available so other websites can embed their data, for example.
“One of the major API providers that’s a backend to a lot of apps is having issues and everything is effectively showing wrong prices,” said Matthew Gould, CEO and founder of Unstoppable Domains, a builder of blockchain-based domain names, said Tuesday.
Coinbase, the largest U.S. crypto exchange, uses its API, CoinMarketCap.com said in a statement. Coinbase didn’t provide an answer on how it sources its pricing data, and a spokesperson pointed to tweets by Coinbase Support instead, which didn’t provide an explanation for the glitches. Coinbase and Crypto.com didn’t immediately respond to questions on how much they pay for CoinMarketCap’s data feed.
By Tuesday evening, the issues of pricing display were resolved at CoinMarketCap.com and Coinbase, although some Coinbase customers later had problems accessing the platform temporarily.
“The perception here is it happens quite often to the level that people start to get impatient,” said Owen Lau, an analyst at Oppenheimer & Co. “While people are still looking for the root cause, I won’t be surprised to hear that people would blame the client facing app like Coinbase even if the problem comes from the data supplied by the third party.”
Technical glitches have long plagued the cryptocurrency world, with many exchanges often having trouble processing transactions during period of high trading activity. The feature of anonymity that has been a selling point since the development of cryptocurrencies has also made it difficult to resolve hacks and thefts.
“For these markets to be perceived as credible by institutions and regulators, we need reliable and transparent data sources,” said Nic Carter, who co-founded Coin Metrics, a crypto data platform.
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