Introduction
In the last crypto bull run, we saw projects like Polygon and Solana soar by over 150x and made millionaires in the process. But what seems like an obvious investment now didn't seem so obvious back then. This type of success is the goal of every crypto investor, but most people don't know how to achieve it. In fact, most investors who try to do this type of investing end up with projects that turn out to be complete scams. That's why today, I'm sharing my personal framework to find the next hidden crypto gem destined to explode.My number one secret to crypto investing is information flow, so let's get into it.
Information Flow is King
Why is information flow so important in crypto investing? There are three main factors to think about. First, unlike traditional finance, crypto is highly unregulated, and project teams can tease and release early information to benefit their project. This means that the information available to crypto investors can pack much more early alpha than in traditional investing.
Second, crypto trades 24/7, and all coins are accessible to everyone. This means crypto investors can often participate in new project launches as early as insiders. There are new DeFi tokens listing and launching every day.
Lastly, insider information is plentiful in the crypto space; it's almost like the norm. These alpha signals are often delayed by weeks and even months before reaching the general public. So just knowing the surface-level information on large news sources and social media is not enough. That's why if you want to succeed in crypto, you need to be on top of your information flow and information game. Otherwise, you end up on the opposite end and will always chase late narratives when they are already hyped up.
There is so much information out there in crypto news outlets; however, not every news source is made the same. You need to distinguish between a good source versus a bad source. So let's discuss this.
Good Information Sources
Are some typical good information sources in crypto? In general, you want to aim for high information density and low opinion-based sources. This is the key factor that differentiates a good source versus a bad source. Here are some useful information source types that I like to follow.
First off, we have tracker sites.
Tracker Sites
Like CoinGecko, CoinMarketCal, April Clock, DeFi Llama, etc. These are always good because they only focus on the factual information and metrics to give you a direct comparison between projects. There isn't any bias or opinions.
Now, unlike tracker websites which focus on numbers and metrics, I have to give a bit of a warning on large crypto news sites like CoinDesk, CoinTelegraph, Decrypt, and The Block, etc. Although these news sources are often seen as the expert outlets in crypto, they are definitely not perfect. All of the publications on these websites can be bought as promotional packages for your specific project. Yes, they have certain selection criteria which act as due diligence, but still, keep this in mind. A lot of it can be promotion.
When it comes to larger narratives and events reporting, these news sites can often recycle information that happened weeks and even months ago. Whenever I read a highly intriguing piece of news that's seemingly a huge event, I don't act on it right away with just one news source. Instead, I usually search for the same keywords on Google and Twitter to find out if this news is accurate and if it's truly breaking news that people haven't reacted to.
More often than not, the headlines would have been overexaggerated for publicity, or sometimes the events have even happened months ago and have long been speculated on. Things like mainnet launches, large partnerships with traffic companies, certain countries embracing or banning crypto, all of these types of large news fall into this category. In general, always fact-check your crypto news from news websites; never trust one single source alone.
Newsletters
These are typically newsletters that you receive in your email and can also read on Substack. Keep in mind that not all newsletters are useful in crypto, as some of them can be highly vague and only discuss the most popular topics for the sake of clicks. This is why I like to focus on minimalist newsletters. These are things like daily or weekly updates that cover a large amount of news updates with only one or two lines of description for each event, without the extra added opinion. These lists have very high information density and cover a wide range of topics. You can quickly skim through them, and they can act as really good starting points for your research. And because there's so much information covered with not much opinion, you can trust that they are not shilling any specific project.
Some of my favorite crypto newsletters right now are Lin's Leverage, Crypto Illuminati, The Daily Dijon, and Shiro's Alpha.
The next good information Source type is crypto Twitter.
Crypto Twitter
Twitter is probably the best place for crypto alpha because it's where most of the power users in the crypto space spend their time. So you get the fastest breaking news and highly advanced strategies. If you've ever read a crypto news article on one of the bigger news publications like Yahoo, CNBC, CoinDesk, or CoinTelegraph, chances are the source of the articles came from Twitter. Nowadays, however, Twitter is quickly becoming another engagement farming social media platform. There are so many so-called Twitter alpha accounts who only post long Twitter threads that are copying everyone else's ideas. You need to avoid these high engagement farming tweets. For example, if an account uses 20 tweets in one thread just to talk about one specific project, you should consider if this is a paid advertisement. Otherwise, why would they give the alpha away just like that?
From my experience, most of the insider alpha comes in two types of tweets on Twitter. The first type is just super short cryptic tweets. This usually happens when someone finds an interesting project early and tweets out its name without doing much research. The best example recently is the super-hyped-up Pepe Coin. People found this meme very early and tweeted it very early as well.
The second type comes in the form of lists. Whenever I see a tweet thread covering 5 to 10 projects in a specific narrative or covering the top events or project launches for the week, these can be really good alpha. Essentially, it summarizes everything that happened in a specific narrative and kicks you off for your crypto research.
Crypto YouTube
sources for obtaining early cryptocurrency alpha. Creators aim for views, which leads them to produce content on topics that are already well-known, easy to access, and have high search volume. It's a paradox—early crypto alpha often comes from lesser-known projects, but YouTube videos on these topics would get fewer views as they are not widely popular yet.
This paradox applies to most crypto YouTubers, including myself. Many of us have insights into projects, airdrops, and upcoming developments, but these insights are not widely shared until the events have already taken place, and the information is no longer considered alpha.
For example, consider the airdrops and ecosystems of projects like Arbitrum, CKSync, and StarkNet. While I made videos on these topics early last year, they didn't gain much popularity at the time. Ironically, these same topics became highly popular right before the airdrops and mainnet launches, by which time the information was already widespread.
In summary, while YouTube can be a good starting point for discovering new cryptocurrency ideas, it's important to recognize that the platform's pursuit of views can be at odds with early crypto alpha. Valuable insights often emerge from lesser-known projects, and by the time they become popular video topics, the alpha may have diminished
Podcasts
because it requires a technical background. That's why these in-depth discussions often contain valuable insider knowledge. To find these insightful podcast interviews, you can explore popular cryptocurrency-focused podcasts and YouTube channels such as Bankless, Empire, and more. They frequently host project founders and key team members to delve into the intricacies of their projects.
In conclusion, when searching for the next hidden gem in the crypto space, you need to have a strong information flow. Crypto is highly unregulated, trades 24/7, and is rife with insider information. To be ahead of the curve, you should rely on valuable information sources such as tracker sites, newsletters, Twitter accounts, and in-depth podcast interviews with project founders. These sources can provide you with vital insights and alpha to help you make informed investment decisions.
Remember, crypto investments come with risks, and it's crucial to conduct your own research and due diligence before making any investment decisions. The more you know, the better equipped you'll be to navigate the complex and ever-evolving world of cryptocurrencies.