How to use on-chain data to find 100x investment opportunities

bitcoins and u s dollar bills

The coin market has immense potential for people who understand how to find the hidden gems—the cryptocurrencies, whose values could rise in a few months or years.

This is how to find these gems using on-chain data. These are data sets that are publicly available to people on the blockchain. They include the transaction volume of a digital asset, the wallet addresses that are transacting the asset, and other interesting metrics that an investor could use to make informed decisions on the asset. The idea is to understand how investors relate to the asset. If they’re buying it at the point of release, it is an indication that there is something interesting about that asset that has attracted many investors.

Check market cap and volume

According to an on-chain analyst, Cyril-DeFi, the first thing to look out for in finding a potentially good investment that could yield 100x returns is the market cap and the volume.

According to him,

“First, look for coins with a low market cap and high transaction volume.”

Low-market-cap coins have more room to grow, and a high transaction volume indicates that there is interest in the coin. ” 

He said that keeping it simple would ensure that you do not miss opportunities.

Whale watching technique

Another onchain analyst, The DeFi Investor, said that the best way to find potentially valuable investments is by following or, rather, tracking whales. Whales are wallets that hold very large amounts of cryptocurrencies.

“Whale watching can help you find the next 50 diamonds.”

He added that there are many services that can help you do this, but they’re usually quite expensive. So doing it yourself practically saves you a lot of money.

Some tools that are valuable in whale watching are ArkhamIntel and eBankDeFi. These tools enable the user to track profitable tokens and the wallets that invested in them. The user can then check the investment history of that wallet to understand if they have always made the right calls in terms of finding potentially profitable tokens. If they have been doing this for new tokens that later became successful, the user can follow the whale and even be alerted when they make a new investment.

To track a whale using Arkham Intel, start by looking at a token that has made remarkable gains in the past. The DeFi investor used LIDO as an example. Within the dashboard, you can see the wallets that have invested in the token. Here is a step-by-step illustration.


Author: Kamma

Kamma is passionate about the prospects of blockchain and the freedom cryptocurrencies afford people across borders. He holds small amounts of bitcoin and tether.