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Digital Assets Market Faces Data Quality Issues, Driving Growth in Crypto Data Providers
- The cryptocurrency market data industry faces challenges such as mislabeling and measurement errors, highlighted by academic research.
- Analysis of 20 crypto data providers revealed quality issues, including mislabeling and measurement errors.
- Inconsistencies were found in how cryptocurrencies are identified, with changes in IDs without disclosure and misrepresentation of assets' identity.
- Significant disparities in reported data across providers, particularly in daily close prices and trading volumes.
- Demand for high-quality crypto data is rising as institutional investors seek reliable market data for trading and compliance.
- The lack of standardization in the crypto industry has led to the growth of data providers offering normalized data from various sources.
- The crypto data industry includes sectors like centralized exchange data providers, on-chain and DeFi data providers, and transaction surveillance companies.
- Major funding rounds and M&A activity in the crypto data industry indicate significant investor interest.
- Leading players like Chainalysis, Lukka, and Kaiko are acquiring smaller startups to enhance their technological capabilities.
- Investor interest in the crypto data industry is evident through substantial funding rounds and a surge in mergers and acquisitions.
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