Best Crypto Analysis Tools for Investing (2022)

Best Crypto Analysis Tools for Investing (2022)

Nansen analyzes the top Crypto analysis tools to help beginners make more informed investment decisions!

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Introduction

Investing in cryptocurrencies is difficult. While Bitcoin has been around for over a decade, most of the applications and sectors being built today have only emerged in the past few years. In traditional markets, you rarely get the opportunity to invest in companies this early in their lifecycle. This leads to larger upside potential for crypto investors but also increased volatility and difficulty in evaluating investment opportunities. 

In this article, we’ll cover a few of the best tools to aid you on your crypto investing journey. If you’re new to the space, check out our guide on things to look out for when investing in cryptocurrencies and why blockchain analytics is the ultimate tool to understanding the space to set a foundation for the tools listed below.

Note: The list of tools provided above is not exhaustive and there are countless other tools that can be used. View the list as a set of complementary tools that can be used in conjunction with each other during your research process.

Nansen

Nansen is the leading blockchain analytics platform with a heavy emphasis on surfacing the signal with real time on-chain data supercharged by labeling crypto wallets. With over 120M wallets labeled, Nansen offers the most comprehensive coverage of what’s actually happening in crypto. Investors, both retail and institutional, use Nansen to discover opportunities, perform due diligence and defend their portfolios.

The platform currently has support for 9 chains - Ethereum, Polygon, BNB Chain, Avalanche, Fantom, Arbitrum, Ronin, Celo and Terra Classic. New chains are constantly being added, with Solana being next up on the roadmap. This offers users deeper insight into what’s actually happening on-chain via their own blockchain investigation and helps users make more informed decisions. 

One key advantage of Nansen is its Smart Money labels which allows users to keep an eye on what the best in the space are doing. 

Everything about the tool is catered towards surfacing the signal. The homepage shows users the hottest contracts in the past 24 hours, top increases in Smart Money holdings and top inflow/outflows from Smart Money wallets. 

The other dashboards are broadly split into 2 main categories - discovery and diligence. Discovery dashboards are meant to help users discover new opportunities, surface tokens and trends that are developing before it goes mainstream. Diligence dashboards allow users to do deep dives once opportunities have been identified to make more informed investment decisions. 

The two most popular diligence dashboards are Token God mode and Wallet Profiler

Token God Mode offers detailed on-chain data about a specific token. Users are able to look at transactions, token holder distribution data (number of Smart Money Holders, number of unique holders, length of holding, top wallets etc) and even track crypto exchange balances. 

Wallet Profiler offers you insight into a particular wallet. It shows you a comprehensive overview of the holdings in the wallet, a breakdown of the counterparties the wallet has interacted with, recent crypto transactions and even NFTs.

There are other general dashboards that offer high level overviews of various segments in crypto - Project, Multichain, DeFi Paradise & DAO Analytics. Project dashboards showcase on-chain data on various projects such as Axie Infinity, Lido and LooksRare

Multichain dashboards offer overviews of your favorite blockchain, giving you an insight into key metrics such as daily active users, daily transactions and number of users/transactions the protocols built on top of the chain are having.  DeFi Paradise provides users an overview of what's going on in DeFi and what Smart Money is doing in the space. DAO Analytics offers an overview of DAO’s liquid assets and active voters in DAO Paradise and lets you dive deep into specific DAOs on-chain data via DAO God Mode.

If you’re interested in learning more about the product, we’ve weekly office hours episodes on Youtube where we go through various dashboards and occasional alpha leaks. For all you readers out there, we’ve written an article that covers how to invest in Cryptocurrencies that feature a bunch of Nansen dashboards. 

If you’re a more hands on person, sign up today to get started!

Glassnode

Similar to Nansen, Glassnode is also an on-chain analytics platform. However the difference lies in the focus of the two platforms. Nansen focuses on enriching on-chain activity with labels and mapping out a multichain world, Glassnode is best known for their BTC analytics that covers every metric you could think of.

Beyond on-chain data, such as exchanges supply, circulating supply, daily active addresses, transaction counts, etc, Glassnode covers many other metrics for BTC. Derivatives, Miner data, Potential market top/bottom indicators (NUPL, percent of addresses in profit, etc) and Purpose BTC ETF data are examples of other metrics that they cover.

CoinGecko and CoinMarketCap

Two of the most commonly checked sites in the entire cryptoverse. CoinGecko and CoinMarketCap are the two leading cryptocurrency price tracking sites. Both offer users a view on how the overall market is doing from a price action standpoint. Both sides segment the tokens into categories which allows users to get overviews of the performance of various categories as well as potentially surface new projects.

If you prefer checking prices on mobile, you’ll be pleasantly surprised that both sites have mobile apps that offer great user experiences. A great substitute for checking prices when it’s too painful to open up your favorite exchange app.

DeFiLlama

DefiLlama is the go to source for Total Value Locked (TVL) numbers for DeFi protocols and blockchains alike. The platform has TVL numbers for DeFi protocols across over 120 different chains and for the chains themselves.  TVL is one of the most commonly cited metric when it comes to evaluating a DeFi protocol and at times even for evaluating blockchains. TVL can be viewed as a gauge of users' trust and interest towards a particular protocol. Protocols that are more trust-worthy and have attracted real users will likely see their TVL go up over time as users' activity increases.

Token Terminal

Token Terminal is a fan favorite amongst those more traditional finance inclined. The platform has metrics commonly used when evaluating stocks and traditional companies. Revenue, Price to sales ratio, Price to earnings ratio and Treasury value are the main metrics they provide users. This allows investors to evaluate crypto protocols the same way they would evaluate traditional companies. 

The site has a “Weekly movers” summary tab which can surface protocols that you might have overlooked to your attention. There’s also a data table which shows the changes in the various metrics across different time periods. 

TradingView

TradingView probably needs no introduction. If you’ve spent any amount of time investing, be it in traditional markets or in crypto, you’d definitely have heard of the tool. The tools mentioned above all lean towards fundamental investing, helping you understand a particular protocol in greater detail. TradingView, on the other hand, helps with technical analysis and is one of the best charting tools out there. You can overlay charts with just about every technical indicator that exists and set up alerts based on trading indicators or trading strategies of your choosing. 

Conclusion

Blockchain technology makes data more readily available, opens up new methodologies and metrics when analyzing a crypto project compared to traditional markets and companies. Beyond relying on traditional metrics such as financial ratios, the quality of the team behind the project, the actual product itself, you have the additional benefit of on-chain data. On-chain data allows you to see who's actually buying the token, what are the profiles of these buyers and spot patterns before things are actually announced. Leveraging on all of the tools listed above helps you do more holistic analysis on protocols you're interested in and might help you become a better investor over time.

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