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How to track smart money in crypto? The first step towards financial freedom.
Summarized by AI
Original Title: "How to Track Smart Money in Cryptocurrency? The First Step Towards Financial Freedom"
Source: veDAO
Smart Money has always been a focus in the cryptocurrency market, and strategies based on tracking Smart Money have indeed provided substantial returns for ordinary cryptocurrency investors. In fact, the proportion of investors using Smart Money-based cryptocurrency trading indicators, strategies, and tools is gradually increasing. Next, veDAO will lead you to understand Smart Money in the cryptocurrency market and how to track them.
One, what is smart money?
Smart money refers to professional investment institutions or individual investors in the cryptocurrency market who have outstanding research and information advantages. They have rich trading experience and excellent historical performance, and generally have relatively large amounts of capital. Their investment philosophy is mature, and their understanding of the cryptocurrency market is more comprehensive and thorough than ordinary investors. The dynamics of smart money have special significance for ordinary cryptocurrency market investors.
二、Why track Smart Money?
The high volatility of encrypted assets and the severe information asymmetry in the market, coupled with the increasing number of encrypted asset types, have made the Matthew effect in the encrypted market stronger, making it more difficult for ordinary investors to obtain market alpha, while a few smart investors are making a lot of money. This is because smart money can obtain information and resources that ordinary traders cannot easily access, giving them an advantage in the cryptocurrency market. For ordinary investors in the encryption market, tracking smart money can help them identify market trends earlier, discover more and better investment opportunities in a timely manner, and achieve the same returns as smart money or reduce the gap between their returns and those of smart money.
3. How to track smart money?
In the encryption market, due to the public and transparent nature of blockchain, users can view every transaction conducted on the blockchain. Through data processing and filtering, it is theoretically and practically possible to identify transactions made by smart money.
To track smart money, the first step is to discover and find smart money. Investors can use blockchain browsers or smart money-related third-party tools to screen for smart money that suits their goals and needs. The screening of smart money is mainly based on its past on-chain interactions, transactions, and other on-chain information. Investors can select based on its transaction or interaction types, quantified historical performance evaluation indicators, capital flows, and interaction protocols. After finding smart money, the next step is to track it. For ordinary cryptocurrency market investors, tracking smart money can be achieved by either completely copying their investment portfolio or following their trades. This way, investors can directly benefit from their insights and skills, and achieve more efficient and effective results in cryptocurrency trading, ultimately gaining alpha in the market.
However, it should be noted that not all smart money is as smart as it seems on the surface. Blindly copying all of their trades without thorough research is often unwise, as these traders often enter the market at lower prices, while later traders are in different market conditions. Additionally, some smart money has multiple accounts, and the behavior of a single account cannot represent the true behavior of smart money. A better approach is to use tracking smart money strategies as an important reference dimension, combined with other indicators and analysis to make investment decisions. Currently, there are many specialized tools and platforms for tracking smart money in the cryptocurrency market. Here, veDAO has selected 5 simple but powerful options for everyone.
3.1、Nansen
As one of the most well-known blockchain analysis platforms for tracking smart money, Nansen provides a simple way to research popular projects, new trends, and important on-chain behavior. The platform offers a variety of free tools while allowing traders to delve deeper into individual projects, smart contracts, and wallets. Its most relevant feature is called "Smart Money," which, as the name suggests, allows you to track the on-chain behavior of a large number of tagged wallets.
Nansen Smart Money Tracker provides three main pieces of information about smart money (or addresses) activity on the chain:
DEX Trading: Tracking the smart money's trading behavior in the top-tier DEX market.
Transfer and Interaction: Track all recent transfers of smart money and the contract agreements that interact with it.
Token holdings: Explore the token holdings and profit rankings of Smart Money.
It is important to note that Nansen's Smart Money Tracker allows users to filter smart money addresses, including specific types such as funds, smart DEX traders, airdrop experts, smart NFT traders, IDO experts, staking experts, etc. This can help users refine their search, including custom transaction types that they are interested in.
Nansen's Smart Money Tracker is currently only available to paying users, and the price is relatively high. However, Nansen does offer a 7-day free trial for $9, which can be used to evaluate its value to users.
3.2、Dune+Debank
Dune Analytics is a user-driven blockchain analysis platform where anyone can create their own dashboard and share it for others to use. The platform provides a plethora of community-created dashboards that users can utilize as part of their trading decisions. Through in-depth research, veDAO has found two of the best dashboards that can help users identify and track smart money.
A, Token God Mode Dashboard
This is created by a user named defimochi. This tool allows users to search for a large amount of data on specific tokens that they are interested in, helping them find smart money that may trade the token.
By entering a token address, selecting a tracking time range (e.g. past 30 days), and choosing a relevant blockchain, this dashboard will present a list of the top 100 transactions with the highest estimated profits (along with other data). Users can then browse this list and manually filter out MEV bots to find the true smart money traders - those who are making the most profit from their trades.
Next, users can copy and paste their wallet address into DeBank, where they can learn about their current token holdings and recent transactions. With this information, users can gain some clues for their trading and investment strategies.
DeBank | The Web3 Messenger & Best Web3 Portfolio Tracker
B, GMX Trader Leaderboard Dashboard.
This dashboard was created by a user named adamzjw to identify smart money traders based on profit or loss ratios. Users can then input their addresses into DeBank or other portfolio tracking tools to further analyze their on-chain behavior.
3.3、CryptoRankCryptoRank can be used to detect recent funding trends, although the platform does not provide real-time on-chain analysis like the aforementioned tools. However, CryptoRank provides a wealth of data that can be used to uncover new market trends and opportunities. The platform offers various tools and trackers to help users gain a deeper understanding of the market and current funding investment situations.
For example, the functionality of Crypto Funds and Investors can be used to gain insight into the investment strategies of well-known funds and angel investors. This tool allows you to browse through a large number of venture capital funds, angel investors, and independent traders' investment portfolios and understand their current performance. Users can also see a list of recent projects and recent funding rounds, displaying new projects (and established projects) that have recently received funding, as well as detailed information about the entities involved.
This can help users understand the market trends perceived by Smart Money, enabling them to make wiser investment decisions.
For a broader perspective on smart money in the cryptocurrency industry, CryptoRank also provides various charts highlighting important data such as monthly fund movements, most popular investment categories, and most active funds.
3.4、Arkham
Arkham allows users to find the most profitable traders and is a relatively new on-chain analysis platform. The platform does not automatically provide smart contract wallet addresses and users need to search for them themselves. The platform provides rich information that users can use to find smart contracts through some investigation. Users can easily find a list of active smart contract traders by using its transaction filter and then further filter out the leading traders.
For example, by filtering the results to only transactions within the last hour, with a minimum value of 50,000 US dollars, and limited to transactions made by funds, users can see a list of recent large transactions conducted by Smart Money.
Then, users can browse this list to find new or established cryptocurrencies that are popular among smart money traders, or to identify particularly active wallets that may warrant further investigation. Once you have identified a potentially smart money asset, simply click on its tag or wallet address to access a wealth of additional data, including its recent profit/loss chart.
By browsing several smart money wallets and comparing their recent profitability, users can find a suitable smart money wallet address that they are willing to track. From here, users can view their current on-chain holdings, check their investment portfolio, or scan their recent transactions to analyze their trading strategies. The official website address for the Arkham project is:
Arkham | Deanonymizing The Blockchain
See intelligence on the addresses, entities, individuals, and assets most important to you.
3.5、Chainalysis
Chainalysis helps users track the behavior of smart money by tracking and analyzing transaction activity on the blockchain, and provides information about market participants and investment strategies. This can help users make wiser investment decisions and better understand market dynamics.
By using its proprietary analysis tools and techniques, Chainalysis can track and analyze transaction activity on the blockchain. It can identify patterns and behaviors of smart money transactions, as well as the relationships between smart money and specific projects or entities.
Chainalysis' platform can help users understand the investment strategies and behaviors of smart money, as well as their influence in the market. Users can gain insights into market trends and investment opportunities by analyzing the trading and holding positions of smart money.
By tracking the flow of smart money, Chainalysis can provide detailed information about market participants, including investors, funds, and traders. This information can help users understand market dynamics and make more informed investment decisions. The address for the Chainalysis platform is:
In addition to the above 5 tools, the veDAO Research Institute has also compiled several other commonly used tools to help you easily find smart money.
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