Warren Buffett once said, “Never invest in a business you cannot understand.” That’s one of his main life lessons and one of the rules that allowed him to become the infamous investor that he is today. It means that before investing in something it doesn’t matter if it’s blockchain-related or not, you must fully understand what’s going on beyond the asset’s price.
Information plays a vital role in making investment decisions; no wonder Bloomberg LP, the financial information giant and the provider of professional Bloomberg Terminals, hit $10 billion in annual revenue last year. Investors and traders need information like we need to breathe air.
But let’s not forget that insider trading, based on publicly undisclosed information, is considered a crime in most countries. The SEC in the US sets the maximum prison sentence for an insider trading violation as high as 20 years, and the maximum criminal fine for individuals can go up to $5,000,000.
This just goes to show how valuable information is for investors, and this begs the question: how should we gather info about crypto assets?
Crypto is a fairly new market that is heavily dependent on news, because most assets have speculative value. Why did the altcoin market drop 90% from its all-time high? Because it climbed so high only on speculation. That doesn’t stop you from making a profit on its swings. Actually, this is what makes it so profitable for early investors and traders. So, to make money in crypto you should follow the rules and be informed more than anyone else. But how can you do that? Don’t worry, we’ll arm you with the most advanced tools.
The best information tools that you can find
First, you’ll definitely need a news aggregator that can deliver to you all of hot news in one feed. There’re a lot of aggregators out there, and you should find the one that best suits your needs. But your search may be over right now, because STIPS Oculus has everything anyone would need to get started. It allows users to compare news with the price actions of assets, and that’s something that we don’t see on other news portals.
You will need a reliable charting tool – TradingView could be the one you need. Its engine is used by many crypto exchanges, such as Bitfinex, to internally display their charts, and it has a light mobile version where you can choose all of the crypto assets you want to track. In addition to crypto, it tracks the price of almost any asset on the global market, from US indexes to Russian stocks.
If you’re interested in buying new tokens at ICOs/IEOs/STOs, you may find this Coingecko’s calendar useful. It has all dates of upcoming tokensales, their short descriptions, and some metrics of projects, such as the number of social media followers and the links to their social media pages.
Out of all of them, STIPS Oculus is practically the Bloomberg service of crypto, and they partnered with IBM Ventures to bring you the most valuable data in one place. The platform comes with many features, so it will be appropriate to make a short review of them to understand how they can be used.
Market metrics you should look at
When it comes to crypto, it’s essential to check blockchain data. But to do that we have to define what we consider useful data. The most important metric: the asset flow on the wallets of whales (addresses with a substantial amount of the circulating supply). Whales often act as market makers in crypto. Due to low liquidity, their orders can pump or dump the market, and it’s wise to look at their behavior before opening a trade. STIPS Oculus deploys its own blockchain nodes to collect data from a blockchain and then transfers it to its own database. After transferring, the data is available for analysis through the Blockchain Screener service. It’s possible to check the largest wallets or the biggest transactions for a certain period as well as filter them and compare these activities with the charts for the same period, but having everything in front of your eyes can help you make faster decisions.
Another important metric to consider when we are talking about technology is Github activity. Most blockchain projects are open source, meaning they’re sharing their source code with the community and uploading it to the GitHub platform. STIPS Oculus generates a development activity index based on software update periods. There’s a simple logic behind it: if the project is active, and it pushes new commits (updates), then it’s clear that service is not abandoned. If there are no commits, then its existence is questionable, and it shouldn’t be considered for investments yet. Of course, there could be various kinds of commits, because even the smallest change in the about.txt file will be counted, but overall, all active projects, such as Ethereum or Lisk, deliver actual updates on a daily basis. Also, for a more simplistic overview, you can check the activity on CryptoMiso to get an idea of what it’s all about.
Community activity and marketing activity are important marketing-related metrics. The more people talk about the project, the better it looks for the general crypto community. Just look at Tron, which climbed to the top after the constant buzz generated by Justin Sun, its creator (yes, it works). STIPS Oculus uses IBM resources, such as the IBM Watson supercomputer, to gather data from Reddit, Bitcointalk forums, Telegram chats, Slack, Discord, and it defines the sentiment of users, which can be used then to make your own investment decisions.
Another very important detail about every project trading on the market is its legal status. STIPS Oculus builds a database of legal entities for each crypto project and gathers information about its bank accounts, offices, and registrations. The legal liabilities can have a significant impact on a project’s performance; we can remember how many hurdles Tezos had or why the GEMS project didn’t achieve its goals after getting involved in a lengthy lawsuit.
As we’ve seen, information and analysis are extremely important when it comes to real money. It’s better to refrain from trading rather than going all in after being driven by FOMO. The blockchain market has made many people rich, but at the same time it has made other people poor. Many altcoins haven’t recovered since the bear market of 2018. How many “holders” are still out there?
Of course, even using such tools as STIPS Oculus doesn’t guarantee that you’ll get any outstanding results or even make a profit – there’s too much going on, and you always have to do research on every asset. There’s no magic money-making tool. A black swan event can always happen, such as the hack of a major exchange, or a new ban of crypto in China – you can’t predict that. But at least you can prepare yourself with as much knowledge as you can.
Remember: every winning trade is someone’s losing trade. That’s why it’s crucial to come prepared when coming into such a speculative market as crypto, where the majority of projects are called straight-up scams. To find the true gems, you have to analyze every purchase and remember that even if you win 10 times over doubling your account’s balance every time, you only have to lose 100% once to be left with an empty balance. Trade safely!