Introduction
The cryptocurrency market is often driven by the actions of large investors, known as smart money. These are the whales, institutions, hedge funds, and other players with the resources and expertise to move the market in their favor.
But how can you track smart money in the crypto space and use it to your advantage? This article will explore tools and indicators to help you identify and follow smart money in crypto and some of the strategies and risks involved.
By the end of this article, you will better understand how to spot and profit from smart money in crypto.
What is smart money?
Smart money in crypto refers to the large investors, institutions, hedge funds, and other players with the resources and expertise to move the market in their favor. They are also called crypto entities that trade or invest in a way considered experienced, well-informed, or “in the know” some tools and indicators can help you track and follow the smart money in cryptos, such as Nansen, chainEDGE, and others.
Following smart money is an excellent way to invest in the crypto space because it can help you:
- Identify what the big players are doing in the market and use their actions as signals for entry and exit points.
- Leverage the advantages of smart money, such as more capital, professional skills, and better information sources.
- Discover new and emerging opportunities in the crypto space, such as DeFi, NFTs, and other projects that smart money is interested in.
- Avoid being manipulated or influenced by market noise and focus on the long-term trends and fundamentals.
However, following smart money also has some risks and challenges, such as:
- They are not being able to access all the information smart money has, such as their strategies, motives, and goals.
- They cannot replicate their trades precisely due to different timing, fees, slippage, and liquidity.
- Not being able to verify the authenticity or reliability of some smart money labels or indicators.
- Not being able to diversify your portfolio if you only follow one or a few smart money sources.
Therefore, following smart money in crypto requires careful research, analysis, and critical thinking. It is not a guarantee of success but rather a tool to help you make informed decisions.
How To Track Smart Money in Crypto
Dune Analytics
Dune is a blockchain ecosystem analytics platform that empowers the community to explore, visualize, and share data insights. Dune provides access to rich and reliable data from various blockchains, such as Ethereum, Polygon, Binance Smart Chain, and more.
Users can create custom dashboards, charts, tables, and queries using SQDune’s easy-to-use interface. Dune also enables users to collaborate and learn from other data enthusiasts, join discussions, and discover new insights.
Whether you are a developer, investor, researcher, or enthusiast, Dune is the ultimate tool to understand and interact with the blockchain ecosystem.
Some examples of data insights that Dune provides are:
- The volume and market share of different decentralized exchanges (DEXs), such as Uniswap, SushiSwap, Curve, etc
- The number and activity of holders, traders, and liquidity providers of various tokens and projects on Ethereum and other blockchains
- The price and performance of different crypto assets across different time frames and markets
- The trends and patterns of smart contracts, such as gas usage, function calls, events, etc
- The behavior and preferences of different types of users, such as whales, funds, flash boys, etc
DeBank
DeBank is a web3-native messenger and portfolio tracker enabling you to communicate and manage your crypto assets securely. DeBank supports all EVM-compatible chains, such as Ethereum, Binance Smart Chain, Polygon, Avalanche, Fantom, and more.
You can easily connect your wallet and track all your tokens, DeFi protocols, NFTs, and other web3 activities across different chains. You can also chat with your friends, family, and communities using DeBank’s encrypted and decentralized messaging system. DeBank is the ultimate web3 platform that combines social and financial features in one place.
Some of the advanced features of DeBank’s portfolio tracker are:
- Portfolio performance analysis: This feature allows you to track the performance of your assets over time and compare them to market trends. You can quickly identify which assets are performing well and which need more attention.
- Transaction history and analytics. This feature lets you view and analyze your transaction history across different chains, wallets, and exchanges. You can see the details of each transaction, such as the amount, the fee, the gas price, etc. You can filter and sort your transactions by date, type, chain, etc.
- News and market insights: You can stay updated with the latest news and developments in the crypto world. You can access curated and relevant content from various sources, such as Medium, Twitter, Reddit, etc. You can also see the market data and trends of different crypto assets, such as the price, the volume, the liquidity, etc.
- Web3-native messenger: You can communicate and interact with other DeBank users securely and decentralized. You can chat with your friends, family, and communities using DeBank’s encrypted and peer-to-peer messaging system. You can also purchase or sell attention using crypto tokens.
CryptoRank
CryptoRank is a platform that provides data and analytics for the crypto industry. One of the features that CryptoRank offers is the ability to check recent funding trends for various crypto projects and sectors. With CryptoRank, you can see the latest funding rounds, deals, and acquisitions in the crypto space and the investors, valuations, and categories involved. You can filter and sort the funding data by date, amount, stage, sector, etc.
CryptoRank helps you discover the most promising and innovative crypto projects and sectors and the most active and influential investors in the industry. Whether you are a crypto entrepreneur, investor, researcher, or enthusiast, CryptoRank can help you stay on top of the funding trends and opportunities in the crypto space.
Some of the advanced features of CryptoRank’s portfolio tracker are:
- Portfolio performance analysis: You can track the performance of your assets over time and compare them to market trends. You can quickly identify which assets are performing well and which need more attention. You can also see your portfolio’s profit and loss, the ROI, and the risk-adjusted return.
- Portfolio diversification analysis: You can measure the diversification of your portfolio across different sectors, categories, and chains. You can see the distribution of your assets by market cap, volume, liquidity, etc. You can also see the correlation and covariance of your help and how they affect your portfolio’s risk and return.
- Portfolio optimization analysis: You can optimize your portfolio based on your risk appetite and investment goals. You can use various optimization methods, such as mean-variance, Sharpe ratio, etc. You can also adjust the parameters, such as the time horizon, the rebalancing frequency, etc.
- Portfolio benchmarking analysis: You can compare your portfolio with other portfolios or indices in the crypto space. You can see how your portfolio performs against various benchmarks, such as CryptoRank’s sector indices, category indices, chain indices, etc. You can also see the alpha and beta of your portfolio and how it differs from the market.
Arkham
Arkham is a platform that helps you find the most profitable traders in the crypto space. Arkham analyzes thousands of traders’ trading activity and performance across various exchanges, such as Binance, Coinbase, Kraken, etc. Arkham ranks the traders based on profitability, consistency, risk-adjusted return, and other metrics.
You can use Arkham to discover and follow the best traders in the crypto space, learn from their strategies and insights, and copy their trades automatically. Arkham is the ultimate tool to improve your trading skills and profits in the crypto market.
You can use Arkham to improve your trading skills in several ways, such as:
- Discover the best traders: You can browse the rankings of the most profitable traders in the crypto space, filtered by various criteria, such as the exchange, the time frame, the asset, etc. You can also see each trader’s detailed profile and statistics, such as their trading history, performance, risk, style, etc.
- Follow the best traders: You can follow the traders that match your preferences and goals and get notified of their trades in real time. You can also see their analysis and commentary on their trades and interact with them via chat or comments. You can learn from their strategies and insights and apply them to your own trading.
- Copy the best traders: You can copy the trades of the best traders automatically using Arkham’s copy-trading feature. You can set your own parameters, such as the amount, the leverage, the stop-loss, etc. You can also monitor and manage your copied trades on Arkham’s dashboard. You can benefit from the expertise and experience of the best traders and increase your profits in the crypto market.
Conclusion
In conclusion, the smart money in the blockchain space refers to the large investors, institutions, hedge funds, and other players who have the resources and expertise to move the market in their favor. Tracking and following smart money can help you identify and follow market trends, leverage the advantages of smart money, discover new and emerging opportunities, and avoid being manipulated or influenced by market noise.
However, tracking and following smart money also has some risks and challenges, such as not being able to access all the information, replicate their trades exactly, verify their authenticity or reliability, or diversify your portfolio.
Therefore, tracking and following smart money requires careful research, analysis, and critical thinking. It is not a guarantee of success but rather a tool to help you make informed decisions.
