CoinMarketCap’s first-ever acquisition: Hashtag Capital, for its “true price” algorithm

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Today, we are announcing our first-ever acquisition of a team, Hashtag Capital, which has developed a set of algorithms for “true price” involving liquidity.

The team will be joining CoinMarketCap after the acquisition to further develop pricing algorithms and continually improve our data offerings. As part of our sixth anniversary announcements in May this year, CoinMarketCap announced our Data Accountability & Transparency Alliance (DATA), initially focusing on increasing the availability of data for meaningful analyses for users. The liquidity-focused products developed by Hashtag Capital will drive part of the effort on DATA.

“We are excited to push the envelope on cryptocurrency pricing at CoinMarketCap, going beyond our traditional volume-weighted average prices to even more sophisticated price algorithms and analyses,” said Brandon Chez, CEO of CoinMarketCap, “The Hashtag Capital team will be able to add significantly to our data efforts, and drive the next phase of CoinMarketCap in providing data products to the market.”

The team at Hashtag Capital includes Yangbin “Wybe” Kwok, the co-founder of Zopim, that was eventually sold to Zendesk before its IPO (NYSE: ZEN). He went on to be Director of Engineering, and then Principal Engineer, for the Zendesk Chat product. He is joined by Jeremy Seow, who was the Product Manager for Zendesk Chat, and a Venture Partner at ChainRock.

Hashtag Capital was helmed by Spencer Yang, an experienced executive previously on the international expansion teams of Cobo, CryptoKitties and Unikrn; before joining the cryptocurrency space, he headed the Advertising Optimizations team at Twitter APAC. Gerald Chee, who led portfolio strategy and management at Hashtag Capital, is a seasoned trader of global interest rates and commodity futures.

Evolving our approach to accurate cryptocurrency pricing

At CoinMarketCap, we currently determine the price of each cryptocurrency using a “volume-weighted average price” (VWAP) which essentially assigns a weight based on the volume of the contributing exchange to the cryptocurrency. For example, an exchange that contributes 80% of the trading volume for a cryptocurrency will then have its price weighted 80/20 against the other exchanges’ pricing for that cryptocurrency. CoinMarketCap aggregates from hundreds of exchanges, and we have always (and will always) make it a priority to include as many data sources as possible so that the global price averages are as accurate for our users as possible.

It has always been in our philosophy to provide as much visibility and breadth in our coverage of the crypto market, instead of selecting some exchanges and ignoring other relevant points of liquidity. We believe that this view will continue to drive greater accuracy in the data, as inclusion of all sources of data will create an exhaustive view of global liquidity.

In this expansive view of pricing, the “true price” of any asset is one that takes into account all points of available liquidity within markets where the asset is traded, accurately weighed to reflect the impact of any individual data point in the system. Due to the decentralization of exchanges in the cryptocurrency space, the same cryptocurrency has multiple, similar trading pairs listed on exchanges in every corner of the world, making a proper determination of its “true price” a herculean task.

Initially an absolute returns cryptocurrency trading fund, Hashtag Capital started developing its own determination of the “true price” of markets as part of its fund management. Its goal was to create an accurate reflection of every asset, taking into account all points of available liquidity. This project eventually became the cornerstone of the evaluation for CoinMarketCap to bring on the team to continue its work within the company.

Building on the commitments we have received from our partners in our DATA initiative, this is an opportune time to continue evolving and improving our price index methodology, and deliver even more inclusive and accurate data. We are confident that our focus on accuracy and all-inclusion will drive greater transparency and precision in cryptocurrency price discovery.

More team changes

In addition to the acquisition, we are delighted to announce that two of our core team members have been moved up to our executive team. Carylyne Chan, formerly Head of Marketing, has been named Chief Strategy Officer, and Emily Hurd, previously Head of Business Development, has been named Chief Revenue Officer.

Speaking about the acquisition of Hashtag Capital, Carylyne, who continues to be the spokesperson for CoinMarketCap, said: “We are really excited about the future progress at CoinMarketCap! With the new data efforts we will be launching, in addition to our DATA Alliance, we will be able to provide a truly comprehensive platform for our users and customers, and pave the way for continued industry-wide involvement in crypto data development.”

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