Coin Metrics now offers a new pricing methodology where the price is derived from an asset’s principal market, the market having the greatest volume or trading activity. This pricing methodology is compatible with the accounting principles governing fair value, and it is suitable for valuing assets on financial statements or in other use cases where a principal market price is required by auditors or regulators. The principal market price can also be used for striking NAV of assets for investment funds or as a settlement price for financial products. Finally, it is suitable for any user who prefers a tradeable price from a single market, as opposed to a measure of central tendency of prices from multiple constituents like our Reference Rates. For more information, please see our Principal Market Price Methodology in our Knowledge Base.
What is the coverage universe?
Coin Metrics produces a principal market price once a second for a universe of 550 assets.
Where can I the data?
It is available from our /timeseries/asset-metrics endpoint. The metric principal_market_price represents the price derived from the principal market in U.S. dollars. And the metric principal_market represents the actual principal market. It is available in 1s, 1m, 1h, and 1d frequencies.
Differences between our CM Reference Rates
Our principal market price was developed taking into account the requirements of IFRS 13 and ASC 820 accounting guidelines defining what a Principal Market is and how it should be selected. These guidelines also allow for additional controls to verify the market is active and trades are orderly. As we acquire new data in the future (for example, when a forced liquidation occurs), it is possible some of the steps below will be elaborated to ensure we are calculating a fair market value.
As Coin Metrics already provides a proprietary reference rate methodology to price crypto-assets which we believe to be robust and stable, it is worth briefly describing the philosophy behind producing a Principal Market Price to supplement the Reference Rates. The first and most significant criteria is that certain regulatory agencies require a methodology consistent with the aforementioned accounting principles. These principles clearly describe the preferred ’fair market value’ calculation as one which identifies a Principal Market by trade volume and tracks executed trades in that market.
Beyond external requirements the benefits for a Principal Market methodology are that it is clearly defined and auditable. The price is always taken from a single market, which tends to remain constant, and can easily be traced and double checked for a given time stamp. We minimize computations being done on the price, which reduces the likelihood of unforeseen behavior. Additionally, the trades are always taken from the exchange where the most of the activity is happening, which is a characteristic customers are most likely to be interested in.
Like all things in life, this comes with some trade offs. Our Reference Rates look for a central tendency among several markets. In some cases this can avoid volatility if the Principal Market deviates from the global average, but it also means that the final price may be taken from comparatively insignificant market that is sandwiched between markets of larger volume. With these trade-offs in mind, our methodology seeks err on the side of trusting the largest market by volume of trades, and only exclude a market in extreme situations.
We also try to avoid numerical comparisons of the price between markets in the methodology, in order to minimize the possibility that a price anomaly could affect the calculation of other markets. Our Reference Rate by contrast chooses to combine multiple markets to identify a more stable price representative of the global environment.
For more information, please contact Coin Metrics through our website or at [email protected] for more information on the CM Market Feed.