Money Under the Bridge

Money Under the Bridge

Can bridge flows predate token price movements? We explore this concept in this article and share the results with you.

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As a variation on the theme of smart money investing (see trading crypto with Nansen smart money), we put Nansen multi-chain data to the test. More specifically, we evaluate asset flows on various cross-chain “bridges” as indicators to invest in different L1/L2 native chain tokens.

Our thesis is that, as more assets are bridged over to new chains or to L2 scaling infrastructure, the associated demand for the underlying chain token and the fundamental value of this token are both likely to increase. This should in turn support the native chain token’s price. Here’s what we found… 

Return indices of two strategies selecting the top 3 native chain tokens with, respectively: the larger net USD inflows (g.) and net depositor increase (h.), vs Monte Carlo and ETH benchmarks, over July 2020-March 2022:

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As you can see, following bridge flows worked out really well for the 57 tokens we analyzed! By investing in the tokens with the most amount of flows (both dollar wise and number of users), the simulated portfolio performed much better than buying ETH and our Monte Carlo simulation. 

This analysis includes the great crypto bull run of late 2021, which probably helped boost the returns presented above. However, a random selection among the 57 native chain tokens over the same bull period would have underperformed the bridge flow strategies, which is encouraging. We’ll follow up with additional analyses including “live” data, stay tuned! 

And for the more technically inclined, please refer to our research paper "Using Nansen Smart Money and Bridge Data to Simulate Tactical Investment".

Special thanks to the following Nansen Explorers for their contributions.


  • Darren Lim, Research Analyst
  • Cristian Falcutescu, Research Engineer
  • Daniel Krupiza, Senior Research Engineer

Nansen Query:

  • Ko Miyatake, Full Stack Engineer
  • Jason Xu, Sr. Product Manager

Interested in doing your own on-chain deep dives? Sign up for Nansen today!


The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.

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