CryptoCompare Taxonomy

On  Tuesday (16 October 2018), CryptoCompare, a leading cryptocurrency market data provider, released its impressive “Cryptoasset Taxonomy Report 2018”, which surveys the cryptoasset landscape, and looks at various ways in which crypto tokens can be categorized.

CryptoCompare, which was founded in 2014 by Charles Hayter and Vlad Cealicu, is a global cryptocurrency market data provider, giving institutional and retail investors access to real-time, high-quality, reliable market and pricing data on 5,300+ coins and 240,000+ currency pairs.

By aggregating and analyzing tick data from globally recognized exchanges, and seamlessly integrating different datasets in the cryptocurrency price, it provides a comprehensive, holistic overview of the market. At a granular level, it produces cryptocurrency trade data, order book data, blockchain and historical data, social data, reports, and a suite of cryptocurrency indices. 

CryptoCompare has entered into a number of strategic partnerships to bring real-time, accurate market data to trading professionals and investors, allowing them to identify specific buy and sell opportunities, expand their digital asset portfolios and make better investment decisions. Its main partners include Yahoo FinanceThomson Reuters, and VanEck (more specifically, its MVIS division).

This highly innovative and comprehensive taxonomy “provides retail and institutional investors, regulators and the industry as a whole with an independent classification of cryptoassets, based on the depth, breadth and scope of CryptoCompare’s global datasets.”

With more than a thousand cryptoassets emerging in the last year alone, there was a need for a unified approach to categorizing these assets so that investors could make better-informed investment decisions.

The taxonomy compiled by CryptoCompare Research represents a detailed analysis of over 200 cryptoassets, based on more than 30 unique attributes, covering a range of economic, legal and technological features. CryptoCompare’s analysis considers a variety of perspectives, including “existing natural cryptoasset groupings; regulatory classifications; access and governance; market cap and volume data; level of decentralisation; generation, distribution and supply concentration, to name but a few.”

The taxonomy also offers a summary classification – the “CryptoCompare Archetypes”, which reflects what CryptoCompare considers “the most natural grouping of cryptoassets at this moment in time.”

Charles Hayter, co-founder and CEO at CryptoCompare, had this to say:

“Daily, retail and institutional investment communities express an appetite to invest and develop investment products and instruments based on cryptoassets. Key to this is the demand for a single, independent and trustworthy taxonomy offering transparency, consistency and confidence.”

He added:

“Based on our deep understanding of the cryptocurrency space and the breadth and integrity of our data, we are confident that this taxonomy will help industry participants, as well as regulators, gain a better understanding of the cryptocurrency landscape. In this nascent but fast evolving industry, we aim to offer the clarity required to navigate the complex crypto markets, helping all investors benefit from our experience and insights, and make well informed investment decisions.”

Simon Taylor, co-founder at UK-based FinTech consultancy 11:FS and Advisory Council Member at Global Digital Finance (GDF) explained why this report is “the most detailed taxonomy to date”:

“Global Digital Finance (GDF) has worked directly with global policy makers and standards bodies, to help bring a clearer understanding of the opportunities and risks that arise from cryptoassets. It's clear language is one of the key challenges, given a word can have many meanings to many different professions. Indeed the simple use of “currency” can cause concern when used instead of “payment”. By using the right terms, and by using shared language we can build a shared understanding of the significant potential cryptoassets will bring to the global economy. The work by CryptoCompare is the most detailed taxonomy to date and we look forward to future collaborations.”

Jack Tatar, Managing Partner at Doyle Capital Management (and co-author of the book “Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond”) stated:

“The taxonomy that was defined in ‘Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond’ was intended to create a foundational basis for further study. CryptoCompare’s ‘Cryptoasset Taxonomy Report’ provides a step forward in defining this space through its thoughtful, detailed and exhaustive research that incorporates lessons learned and current thinking since the publication of our book. It’s heartening to see the hard work and effort undertaken to further define the taxonomy of cryptoassets and rewarding to recognise that bright minds are pursuing this topic. What’s been produced here is such a high-quality report that will allow others to build upon what’s provided here.”


Featured Image Courtesy of CryptoCompare