When Nick Lucas first got into the business of analyzing trends, cryptocurrency was nowhere in his sights; rather, his was a big data company that analyzed trends in social media. When he finally did get involved in crypto and tried to find out what was going on, he found it to be a huge and convoluted mess.
The CoinTrend Application
Wanting to understand the topics and the media driving the vitality of the sector, he came up with the CoinTrend app, a tool to understand how investors use the information driving the space. He added features that track sentiment signals and mention, which investors use to spot trends in real time and know what coins are gaining popularity.
The platform also helps investors gauge coin supply. Pump and dumps will try to make it look like supply is limited. The CoinTrend protocol juxtaposes supply and media attention to discern what is genuinely low supply and what can be attributed to pump and dump. If no one is talking about a coin with low supply, users are alerted that something fishy is probably going on.
CoinTrend released its alpha version to a handful of investors in December, and then the beta version in March.
How it Works
Not built on the blockchain, the CoinTrend protocol is hosted on Amazon Web Services (AWS) and uses machine learning centered around NLP (Neuro-linguistic Programming).
The platform sorts through thousands of articles and uses a natural language algorithm to break them down according to relevance and the companies mentioned, as well as an Alexa score of each article. They also use Google and Reddit to determine the importance of websites. On Reddit, every 15 minutes the protocol tracks the latest post about every coin they are currently tracking.
The tool gives signals upon mention in Reddit or when big changes in media sentiment happen. This creates more data points and more actionable information to see what’s happening. The company’s goal is for the list to be created dynamically, using significant amounts of data collection to find talk about coins, a process the company is continuously working on to scour the web for more coins and ICOs.
CoinTrend’s Target Customer
Lucas says the platform has two different categories of customers. The first type is the savvy investor who has been trading and has a lot of different coins and capital. Many of these also have trade bots.
The second type of customer is the novice investor–$1,000 to $20,000 invested—who wants to understand coins before they invest. These investors play with different coins, not unlike a hobby, and do some research before they get involved with each new coin.
In Q2 of 2018, the company issued an API for trade bots. This includes signals to help weigh buying decisions, including changes in coin performance and media sentiment.
As of early summer, the company could claim 600 users and growing, with 30 percent of them coming back once a week, and many of them visiting daily.
Pricing and Competition
Presently, the company is following the “freemium business model.” Once the beta version is done and user feedback has been collected, the plan is to release the new paid model with new features. At that point, there will be a free version, which will give customers data on a one-week delay, and a paid version that will update info every 15 minutes and will start at $100 per month.
Lucas allows that there are many crypto analytics companies, but not all of them have studied media trends. Some of them give insight on different articles and talk about different coins. Some companies focus on the amount of negative and positive articles but don’t delve into what is causing the trends. What CoinTrend is doing, and what the company believes is important for investors, is to understand the topics and judge what impact they will have on an asset.
CoinTrend’s Progress and Funding
Working with a data scientist, the team is currently discovering what topics matter most and notifying users how to find them. They analyze new ICOs and coins that are getting media attention, and the platform currently follows the top 30 coins ranked by CoinMarketCap.com. To this point, the company has been self-funded, but have plans to go into a seed round soon.
The Current State of the Market
As others have, Lucas likens the current state of the blockchain and crypto space to the “Wild West.” He concedes that the biggest takeaway is going to be the underlying technology, the blockchain, but beyond that, he asks “Who knows?” He predicts that new products built on top of the blockchain will also be a big thing, and he doesn’t see ICOs going anywhere.
Where trading is concerned, he sees more regulation as a good thing, which will eventually stabilize the market and cut down on the volatility. He also sees more money in the space helping with stabilization. “Volatility is based on novices freaking out to negative news. The market is driven by this novice investor sentiment.”
If Lucas and his team fulfill the goals they have set for themselves, they stand to play an important role in how such investors see negative news and react to it.
Cryptocurrency speculation is, at its best, an inexact science, and, at its worst, potentially a literal terror. At one time or another, most of us have wished we had a crystal ball to tell us which platforms are going to grow and succeed or have lamented having not gotten in on this or that before it went viral. To those of you who have, I say welcome to the world of CoinTrend, which just might be where such wishes come true.
Written by Paul Keenan.