The financial industry’s digitization has enabled technology to transform how financial institutions compete in the market. Large corporations are embracing technology in order to carry out digital transformation, meet consumer demand, and improve profit and loss. Businesses can maximize the value of data by making sure it is stored correctly and structured.
Companies must respond to these changes in a deliberate and comprehensive manner as the financial industry rapidly moves toward data-driven optimization. Efficient technology solutions that meet the advanced analytical demands of digital transformation will allow financial institutions to fully leverage the capabilities of unstructured and high-volume data, uncover competitive advantages, and drive new market opportunities. This technology solution is the Market data API.
How Can Analytics and Financial Institutions Use Market Data API?
Anyone who has created machine learning models knows that data is “garbage in – garbage out,” and data collection and pre-processing are typically 80% of the work for creating a model. We can definitely see CoinAPI being used in situations where a higher-level model or analysis is required or where cross-exchange data is involved.
Financial institutions analyze data to drive better decision-making. In this post, we’ll take a look at the basic data analysis that you need to take if you want to use the market data API for your financial product and analysis. Let’s get started.
What is crypto Market Data API?
Cryptocurrency market data is critical for understanding the direction, sentiment, and reasons for price movements. Market data platforms such as CoinAPI make it simple for users to understand this data.
Market data typically includes the following types of information:
- Crypto market data explains the price at which particular security has traded on the exchange. Data is kept and stored for long periods of time.
- Market data also includes any large-scale transactions that are taking place. This is critical information for the retail investor
- Live coin prices
- Extensive library of historical data
- historical charts
- crypto assets’ market capitalization
- tracking portfolios
- historical trade and order-book data
How is Market Data Transmitted?
Investors should note that market data is extremely time-sensitive. This means that the data is analyzed and decisions are made within minutes of the data being received. As a result, if data is received with a time lag, it is useless to investors. This is why investors strive to cultivate a source from which they can obtain this data faster than their competitors.
CoinAPI’s premise is to be as close to the exchange as possible while acquiring data as quickly as possible. We have a low latency of 0.5 seconds, which is critical for the financial market.
What is the importance of crypto Market Data?
- Real-time market data allows investors to execute, buy, and sell orders. Purchasing and selling decisions are based on price data that is generated and communicated to them.
- Market data also triggers automated trading orders such as stop-loss orders. As a result, real-time price transmission is unavoidable for open market traders employing any strategy.
- The generated market data can be used to analyze the volatility of a specific exchange. Market data is used to obtain various volatility metrics such as beta, which are used to predict risk.
- We use market data for historical analysis and then compare it to changes in fundamental data to find a link between the two.
- Technical analysis, for example, makes use of market data. Real-time market data is studied as part of this analysis in order to identify set patterns. These patterns aid in forecasting market prices for the foreseeable future.
- With market data API you can access reliable, accurate data from over three hundred sources, connect to multiple asset classes and perform backtesting
In the end, market data is an important component of the financial system. There are numerous services and activities that would become obsolete in the absence of timely market data availability.
How to Use the Market Data API for analytics and financial institutions?
Use the API to Reveal What’s in Your Data
One of the most powerful ways to use APIs is to look at what’s in your data. This can reveal things like outliers, anomalies, trends, and other insights that would otherwise be difficult or impossible to gather. In addition, it can validate existing assumptions about the data you’re working with. When using any API, it’s important to remember that there may be certain restrictions on your data access. For example, it may be necessary to first obtain a license from the source institution before you can access their data. If this is not possible, then you may need to work with another API provider instead.
While it’s important to consider all of these factors when planning your next API project, there are a number of things that you can do right away. For example, you can also research similar projects completed in the past to see if they achieved similar results.
Develop new financial products
Banks can develop products that are likely to sell well in the future based on how well a product sells, does not sell, or to whom it sells. They can also use external data, such as market activity during a recession or which mortgage products sell best when the housing market is stagnant, to develop products that are both useful to their customers and profitable to the bank.
Lower investment risks
With data analytics, determining which investments are most likely to produce a return versus those that will cost investors is no longer a game of chance.
Banks don’t profit from overdraft protection and transaction fees. They invest their deposits in profitable ventures with the help of data analytics. To power advanced big data analytics, financial organizations must collect, generate, and process large amounts of data with exceptional performance and reliability. Precisely’s data integration solutions enable any business to quickly, easily, cost-effectively, securely, and predictably build a modern data architecture that includes any data source, regardless of type, format, origin, or location.
Leverage API technology to provide real-time market data and analytics to trading clients
APIs for the crypto market is a boon to traders, investors, and software developers. Because standard APIs can easily connect these data consumers to accurate and relevant data sources. Furthermore, obtaining stock market data via APIs is simple, coherent, and predictable when properly structured.
A stock API can be extremely useful when developing financial products such as a trading prediction application. You can use these APIs to get the most recent market price and track historical trends for instruments such as equities, currencies, fixed-income products, and more.
When developing a trading strategy (or a machine learning / statistical model), you must first collect and analyze historical data, then build the model and test it on out-of-sample data. As a result, the logical next step is to use historical data from the exchange where you want to trade. Having said that, CoinAPI has done an excellent job of collecting data from various exchanges and pre-processing it (making it gapless), which can greatly simplify your data collection and processing.
What are the most important features of a good market data API?
Many data vendors limit the number of API calls a buyer can make in a minute in order to obtain the data. They do so in order to maintain their competitive advantage.
As a result, you must consider the frequency you desire and quote accordingly. For example, if you request one call per minute, they will only update data once every minute. You can even get 100k daily requests with CoinAPI.
Some latency may occur between data updates. The delay can range between milliseconds and seconds. As a result, before purchasing an API, ensure that this aspect is clear; otherwise, they may sneak some data and you will never know.
API types that are available
CoinAPI provides three protocols: REST, FIX, and WebSocket, so you don’t have to worry about what interface each exchange has or what it supports.
We offer powerful market data and trading API solutions to financial institutions, allowing their traders and quants to integrate or build their own trading applications that best meet their specific needs. Our API solution allows you to easily integrate real-time and historical data, news, and analytics into your trading application. Our API solution enables us to deliver real-time normalized market data to thousands of retail clients.
Tick-By-Tick (TBT) data
CoinAPI has a robust suite of time series analysis product offerings, making it an obvious choice for investment professionals looking to backtest their trading strategies using historical time series data. Furthermore, CoinAPI is arguably the most developer-friendly API provider for a variety of form factors such as web solutions for customers requiring the most reliable data, advanced analytics, and ultra-low-latency trading, thanks to its broad spectrum of programming language support.
Developer-friendly interfaces. SDK in 40 languages
SDKs in 40 languages are available to ensure that CoinAPI’s endpoints are developer-friendly. Our SDKs come with comprehensive documentation in addition to multi-language SDKs, and you can find it on GitHub at https://github.com/coinapi/coinapi-sdk.
Sandbox environment for testing
A sandbox is a test environment that provides a “safe space” for testing, training, and experimenting with different setups or major alterations to your setup. It enables you to replicate your production environment for testing, training, and development. You can experiment with new alterations without fear of disrupting your current production company.
Our API offers secure access to the market data library and is equipped with tools to upload, aggregate, and process the data. The data can help you uncover new insights into your business performance.
How to Use the Market Data API for analytics and financial institutions?
The market data API is only as powerful as the data you provide. Don’t focus on the power of the media, focus on the data it has. The API is only as powerful as the data you provide. Don’t rely on it to tell you everything. Instead, use it to uncover what kind of information is available and what you can do with it. You can test our API Key here.