There are over 43 million active crypto traders worldwide, but who are they? They have different social status, amount of wealth, education, they have different goals in life, but they all share one thing in common – they have a proactive position in life. They want more than just a salary, they want to achieve more. Some of them have gone further down this path, some of them have just started. Luckily, nowadays they have many tools to help them achieve their goals. But first let’s find out how all these traders can be classified.
So many traders, so many goals
Of course, it’s impossible to strictly categorize everyone who comes into the market, because every single person can be a mix of different types of traders. But overall, we can define three general categories:
Small investors – Those who save a little bit from each paycheck and try to make money on it. Most of them are trading based on emotions and tend to act chaotically.
They don’t know how to be patient; they buy and sell according to price movement, especially if they get scared or agitated. They rarely do a proper analysis, and most of them lose money because they’re malinformed and follow every “trend” they hear. What do they need? They need news and market analysis delivered to them to assure their investment is safe. Otherwise they sell the bottom and buy the top. They need a tool incorporating all important information necessary for decision making and understanding why an asset’s price behaves the way it does. We’ll discuss such tools later on.
Active traders – These are the people who make or lose money with every market movement. Active traders usually already have some capital to trade with, and they try to multiply it by predicting the direction of the market. Active traders can be divided into two groups: wealthy traders (who already completed the wealth accumulation phase) and beginners (who sometimes get stuck in a position and thus suddenly become long-term investors).
Generally, active traders are more educated in reading patterns and indicators. Some of them may have their own trading strategy, but crypto can move in a very unpredictable way and drawing charts won’t help. What this type of trader needs are indicators of the crypto market that can help predict such strong movements. For example, being able to monitor transactions between the wallets of crypto whales could help – if they move their coins to an exchange, it could mean they plan to dump them. Of course, such tools also exist, and we’ll talk about those later.
Big investors – What’s the difference between these traders and small investors aside from the size of their wallets? Big investors have a lot more conscience when it comes to evaluating assets, because there’s a lot of money at stake. Of course, not all of them are genius analysts, some of them were lucky enough to simply buy Bitcoin in 2010 – but can we say “lucky” about the people who saw this potential when no one else was seeing it? Anyway, most of the big investors made their fortunes by themselves, and they know how to count money.
Big investors usually don’t care about technical analysis and trading patterns, they aren’t interested in catching price swings. They simply buy an asset when its price has the potential to grow and patiently wait until they can cash out. They don’t enter and exit positions chaotically like small investors do – the crypto market is illiquid and the size of their positions don’t allow to do it without causing pumps and dumps. That’s why they play the waiting game. For them, it’s not necessary to check the price everyday, the most important thing for big investors is to understand that everything goes according to the plan of the company or a project that they invested in. That includes the understanding of the legal status and the development status of the project. Where can you get that info? It’s time to talk about the tools.
All-in-one, like a Swiss knife
As you’ve probably noticed, all three types of traders need information to make the right decisions. We’ve already pointed out that there’s rarely any pure form of any of these types, so it would be great to have one tool that could provide all the necessary information without switching between dozens of tabs and different sites. Traders have a choice – to use Coinmarketcap for checking prices, TradingView for drawing charts and using indicators, Reddit for defining market sentiment, CoinDesk for the latest crypto news, and checking the GitHub accounts of various projects to understand if everything is going according to the roadmap. Or you could just use an all-in-one tool. One of the few tools on the market that incorporates most of the information any trader could need is STIPS Oculus.
STIPS Oculus is a platform backed by IBM Ventures, and it has many features:
- Tracking the asset flow on the wallets of whales. STIPS Oculus has its own nodes running on most major blockchains that allow it to download transaction histories and make its own database of addresses and transactions for analysis. It’s mostly important for traders to track such data to predict and avoid dumps.
- Gathering all latest news in one place. Even more, it allows users to compare the price action of an asset with the time of news publications about it, determining the influence of news on price. That would be useful not only for small investors, but also for traders and even big investors.
- GitHub activity is important for big investors. It shows how much work is put into a project over time. If nothing happens on GitHub, and the project is declared to be open source, then that’s the reason to revise your approach toward this asset.
- Big-time investors may also be interested in the legal status of the projects they’re invested in. STIPS Oculus gathers a database of legal entities for each crypto project, containing information about its countries of registration, offices, and bank accounts.
- Marketing activity and community activity of the project – for those who understand how hype works. Many projects hardly have any fundamentals and real adoption, so besides Bitcoin, the things that affects them the most are news and marketing, building hype around projects. The community activity is a direct reflection of the marketing efforts – if a project has no marketing, all you read about on its subreddit are negative complaints about its non-transparency. To gather data and to define a sentiment on Reddit, Bitcointalk forums, Telegram chats, Slack, and Discord, STIPS Oculus uses various IBM resources, including its supercomputers.
Information plays a vital role in making investment decisions. The more information you have, the more chances you have to succeed. Slowly but firmly, the crypto space is evolving from a Wild West market to a Wild West market with sheriffs (regulators) and railroad infrastructure (better analytical tools, more reliable exchanges). Five years ago we didn’t have anything even remotely resembling this – all we had were the charts on the exchanges, nothing more.
Maybe someday we’ll see it evolve into a fully-established civilized market with fundamentals and a capitalization equal to FOREX or stocks market. But for now it’s clear that we’re on the right track, and with the right tools we already have enough to make informed decisions, choosing the right assets, and make a profit, no matter if you’re a small or large investor or if you prefer to trade actively or just buy and hold. The most important thing is that nobody can catch you off guard. The rest is up to you.