The price for each individual trading pair is acquired directly from exchanges. If the acquired price is the unconverted price, then the price of the pair is calculated by taking the unconverted price reported directly from the exchange and converting it to USD using TokenInsight's existing reference prices.
TokenInsight converts non-USD fiat currencies (e.g. JPY) to USD prices based on current FX rates provided by OpenExchangeRate.
Example 1: USD Pairs Price
We assume Exchange A has BTC/USD pair, and this pair has the following information:
- Exchange : BTC/USD = 40,500 USD/ 1 BTC.
Hence, the reported BTC price on TokenInsight for BTC/USD pair in Exchange A is 40,500 USD
Example 2: Non-USD Fiat Pairs Price
We assume Exchange A has BTC/JPY pair, and this pair has the following information:
- Exchange A: BTC/JPY = 5,000,000 JPY/ 1 BTC.
- The last known reference price (OpenExchangeRate) of JPY in USD = 0.008 USD/ 1 JPY
- BTC/JPY Price (Exchange B) = (5,000,000 JPY/ 1 BTC) * (0.008 USD/ 1 JPY) = 40,000 USD/ 1 BTC
Hence, the reported BTC price on TokenInsight for BTC/JPY pair in Exchange A is 40,000 USD
Example 3: Other Crypto Pairs Price
We assume Exchange A has BTC/ETH pair, and this pair has the following information:
- Exchange A: BTC/ETH = 13.5 ETH/ 1 BTC, and TokenInsight's last known reference price of ETH in USD = 3,000 USD/ 1 ETH
- BTC/ETH Price (Exchange A) = (13.5 ETH/ 1 BTC) * (3,000 USD/ 1 ETH) = 40,500 USD/ 1 BTC
Hence, the reported BTC price on TokenInsight for BTC/ETH pair in Exchange A is 40,500 USD
The price of any cryptocurrency listed on TokenInsight (also the reference price of the market capitalization) is calculated based on the trading volume-weighted average method. The higher percentage of volume contributed from the pair, the more influence it has on the average price. The rationale for using a weighted average is because in general, markets with higher volume have higher liquidity and are less prone to price fluctuations.
However, pairs with the following price features will be manually excluded from the calculation of the cryptoasset's weighted average price:
- 1.Pairs that are identified as abnormal values/ outliers, including:
- Null value for the trading volume returned by the exchange.
- For cryptocurrencies with 3 or more trading pairs, any pair that is detected by the algorithm as a clear outlier/abnormal value compared to other pairs for that specific cryptocurrency.
- For cryptocurrencies with 2 or fewer trading pairs, any pair whose price change is 100 times larger than the previous price will result in the pair being classified as an abnormal value.
2. Pairs that have no new trading data being obtained from the exchange in the last three hours.
The invalid trading pairs are denoted by grey background and text style to represent the inactivity of the free market.
Below we give an example of how we calculate Ethereum (ETH) price with different trading pairs in different exchanges.
Example 1: (cryptocurrency price with multiple trading pairs)
Assume we only track Exchange A and Exchange B which trade ETH only in USD and BTC respectively.
- Exchange A: ETH/USD = 3,000 USD/ ETH, with 60,000 ETH trading volume (in 24hrs);
- Exchange B: ETH/BTC = 0.08 ₿ / ETH, with 40,000 ETH trading volume (in 24hrs); and TokenInsight's last known reference price of BTC in USD = 40,000 USD/ 1 BTC
- Exchange B: ETH/BTC = 0.08 ₿ / ETH = 3,200 USD/ ETH
- ETH Price in USD (TokenInsight)
- =[60,000 / (60,000 + 40,000)]* 100% * 3,000 USD + [40,000 / (60,000 + 40,000)] * 100% * 3,200 USD
- = 60% * 3,000 USD + 40% * 3,200 USD
- = 3,080 USD
Hence, the TokenInsight ETH price is 3,080 USD.