To navigate this new industry, new Web3 investors will rely on AI data analytics. The best way to use it is to make smarter, better crypto investment choices.
Data analytics are often overlooked when it comes to cryptocurrency. Cryptocurrencies, distributed ledgers, and non-fungible tokens have had a tremendous impact on the global marketplace.
Meanwhile, the sheer pace of growth makes it difficult to keep up. It is difficult for even people at the forefront of cryptocurrency to keep up with the pace of innovation. NFT alone experienced a 38,000% growth rate from 2020 to 2021.
Here’s where Web3 data analytics come into play. A similar set of tools should be made available in the newly established crypto markets, in the same way they are in the legacy trading arena of fiat currency products.In the new global marketplace built on distributed ledgers, data analytics are pivotal to Web3 trading and investment – and they are a pivotal part of the solution.
1. Industry Developments
Within legacy markets, change and innovation are less evident. Many industries, such as energy, housing, finance, healthcare, etc., are subject to stringent regulations.
As a result, the market is stabilized, but growth is stifled, and true change is prevented, ultimately leading to wealth centralization. In times of crisis, the majority of first-time millionaires are created. It is because quick changes create opportunities for those who are in a position to seize them.
These opportunities are provided by Web3 data analytics. Monitoring the large influx of new NFTs and new tokens across multiple blockchains is possible using these analytics. Real-time market insights are thus possible. Additionally, traders can spot real trends ahead of time.
Without AI and machine learning components, it’s simply not possible to track this rate of change. Using sophisticated blockchains (also known as “Tangles” or “DAGs”), the machine-to-machine economy could soon begin. For meaningful insights into these transactions, data analytics are essential.
2. The impact and role of social media
The most reliable sources of information for evaluating coins are social sites like YouTube, Reddit, Twitter and Facebook. Elon Musk’s tweet boosted Dogecoin’s price by 50%, and many coins rise or fall based on such endorsements. Kevin O’Leary and Robert Kiyosaki have recently endorsed Solana, and he is currently doing well.
Marketing and advertising new crypto projects are also primarily done through social media platforms. The term “shilling” is becoming common in the crypto markets, with job opportunities for Telegram/Discord “professors” willing to hype up a particular coin consistently so people remain interested.
Analytics tools can help distinguish between real and false activity on social media, resulting in a genuine rise or fall in a given coin over the short, medium, and long term.
Quite a bit of information is available on these large social media platforms, but it needs to be sorted and classified correctly, which can only be done through Web3 data analytics.
3. Limiting Web3 scams
In general, the crypto industry is currently driven by hype and hysteria. Scams are quite common. Shilling a coin is a common scheme. The scammers don’t create anything; they simply promote an existing coin via multiple media channels. When the coin reaches a certain price, the scam artists sell their shares, which they had purchased at a much lower price.
In the crypto market, there are many types of scams (too many to describe here in any detail). Newcomers will be prevented from becoming victims of criminality thanks to a powerful investment tool backed by data analytics.
There is a need for people to realize that most crypto coins are either scams or do not have long-term viability. Those who make money from certain coins seldom learn about those who fail (unless it is very large, like the $60 million Anubis DAO scandal).
With Web3 analytics, investment tools are arguably the best way to gain protection in a market infamous for its lack of investor safety. Due diligence protocols can be provided by the Web3 toolkit to indicate if a coin or project is safe or not.
Smart Crypto Investments
We are fortunate to already have the tools to make informed Web3 investments with deep data analytics. The Defy Trends toolkit, for instance, empowers people to invest in crypto and NFT based on data. Cryptocurrency and NFTs are likened to Bloomberg terminals. A comprehensive overview of the market can be gained from this toolkit by aggregated millions of data points into easy-to-understand indicators.
Currently, millions of people are entering the crypto space without understanding it. Defy Trends and other Web3 analytic frameworks will provide the insights necessary to make informed decisions, rather than just hoping and praying for a coin to go up on hearsay and rumors.