Investors Clamor for Digestible Data Analytics in the Fledgling Crypto Industry

Cryptocurrencies are blooming into a fresh asset class and creating a new era for the global finance industry. These digital assets are appealing to more and more people who would like to enter the market and gain from the potential of decentralized currency. The first generation of crypto services focused on things like exchanges. Market analysis tools were scarce, as most people were highly focused on Bitcoin, and little else. Thousands of exchanges were created so investors can buy, sell, and trade cryptocurrencies.

Some of these currencies allow people to make secure and untraceable transactions, and most have gone up in value substantially. People know Bitcoin, Litecoin, Ethereum, and XRP, but there are thousands more that present opportunities for any kind of investor. Some of the smaller tokens can create outsized gains, which is appealing to investors.

However, new entrants to the crypto markets need to learn about crypto, so they can make smart decisions about where to deploy their capital. Analytics are key, and there are a few good ways to use big data to any crypto investor's advantage. Simply put – the advent of AI in the crypto markets will change the way investments are made. Just like the big data systems that are used in the equity markets, any investor who has access to AI-driven crypto analytics will have an advantage.

Cryptocurrency Investment and Data Analytics

With thousands of blockchains out there, market data in the crypto space isn't as simple to analyze as it would be on a centralized exchange. But just like any other financial market, data analytics are extremely important and allow investors to make informed decisions. Analytics technology is most valuable where investors can use data to make real-time decisions at any time frame. Some investors look to buy a token for days or weeks, while other need to take on longer-term positions.

Using analytics tools is a good idea for investors, and as the quants on Wall St. have demonstrated, these systems can help investors avoid huge losses. Many data analytics platforms were designed to offer investors solutions for understanding how the crypto market works, and one of the most interesting new ones is Defy Trends. The Miami-based platform is developing its first product, which takes advantage of Artificial Intelligence (AI) to create data analytics that works for any investor. Unlike many of the trading bot platforms, this one allows investors to access far more information, and dive deeper into the markets.

The Rise of Data Analytics

Blockchain-based data analytics overcomes the disparate nature of decentralized platforms and allows for direct comparisons between thousands of blockchain platforms. In addition, some recent advancements allow investors to understand the energy requirements of a blockchain, as many use tremendous amounts of power.

As blockchain and crypto adoption has been growing among industries, blockchain data analytics has also become a necessary part of the market. Developers, investors, institutional investors, and governments are looking for ways to better understand the blockchain space. Data can guide investment strategies, manage risk, conduct cybersecurity investigations, and a lot more.

The demand for blockchain and crypto data analytics is predicted even greater in the future when venture capitalists are pouring money into companies providing these services, and larger institutional investors need hard data on these systems.

A Popular Industry

There is no doubt that early-stage investors see the potential of data analytics in the blockchain space. In June of this year, the San Francisco-based startup TRM Labs closed a US$14 million Series A funding round. Later, Chainalysis raised a US$100 million Series E funding round and nailed a US$4.2 billion valuation. Singapore-based blockchain data analytics platform Nansen secured a $12 million Series A fundraising round led by Andreessen Horowitz.

In The Startup Showdown, Panoramic Venture Capital’s high-energy competition, which took place early this month, saw judges choose two winners, with one of them operating in the blockchain analytics space. As such, each startup received a $120K investment from Panoramic instead of only one being awarded. DeFy Trends was one of the companies that won funding in the competition.

Why AI?

AI-based algorithms can analyze historical data to predict future trends and help investors make constructive decisions. These new projects can offer a range of tools such as an Index, which scores coins and informs traders which are under- and over-valued as a way to see the indicators that are most important to their reference. Data analytics tools like the suite that Defy Trends created can help to educate people about crypto markets via bringing huge amounts of data together – and making it understandable to a single person.

Analytics technology can contribute to creating a safer cryptocurrency environment through its data. The combination of data analysis and constant monitoring will make it easier to identify opportunities and great crypto traders. Investors and traders can use analytics platforms to look at the blockchain network that operates behind the team that created the cryptocurrency to make smarter choices.

Simply put, AI-based data analytics allow investors to understand markets in a way that would not be possible without the technology. The advantages they provide are impossible to match with any other technology, and will likely grow from here.

Sources

Disclaimer: The opinions in this article belong to the author alone and should not be considered investment advice.