Article Rewrite:
Title: The Role of Research Analysts in the Crypto Industry: Insights from Bitget’s Chief On-Chain Analyst, Jack
Introduction:
In today’s crypto industry, it has become a trend for crypto exchanges (CEX) to establish their own research institutes and build up their investment research teams. The competition in investment research is essentially a competition for talent. Having a strong talent pool and conducting in-house research is crucial for analyzing the dark forest of the blockchain, identifying potential assets in advance, and guiding crypto investors with their investment operations. Additionally, it is also indispensable for listing coins and developing secondary strategies.
In this article, we have invited Jack, the Chief On-Chain Analyst at Bitget, to have an in-depth conversation about the daily work of a research analyst and gain insights from his perspective.
Introducing Jack:
Jack, a technology expert by background, previously worked in a Web2 financial software company, specializing in data development and analysis. His journey into the crypto industry began with a chance encounter. A friend told him about mining ETH using graphics cards, which led him to start mining ETH with his spare machines at home. As the accumulated ETH grew, he began participating in some secondary markets around 2021. This was during the peak of the GameFi trend, and it was during this time that he made his initial profits.
Jack’s First Success and Achievements in the Current Bull Market:
Jack’s first success came from the previous GameFi market boom. He invested less than $1000 in a game project called RACA, and within a month, he made over 1 million RMB in profits as the project’s value soared. However, Jack admits that at that time, his understanding of the project and gameplay was limited, and he sometimes made impulsive decisions without fully grasping the project’s fundamentals, leading to losses. Nevertheless, he has learned from his experiences, and his investment research approach has evolved significantly since then.
The Significance of Web2 Data Analysis Experience and Becoming a Qualified Web3 Research Analyst:
According to Jack, the main difference between Web2 and Web3 data analysis lies not in the data itself but in the business aspect. Web3 data is directly related to money, so the analysis should focus on three key questions: where the money is, where it flows, and who is most likely to profit. Analyzing these questions requires different tools and approaches, and it is crucial to understand the business logic behind them. Jack believes that having Web2 data analysis experience, combined with a deep understanding of Web3 business, is essential for becoming a qualified research analyst in the crypto industry.
Early Discovery and Recognition of Data: Insights from the First On-Chain Data Dashboard for PEPE:
Jack believes that the early discovery and recognition of popular assets can be approached from two dimensions: on-chain and off-chain. On-chain analysis involves monitoring investment activities that leave a trace on the blockchain. It is important to pay attention to short-term on-chain dynamics, which can be considered as windows of opportunity. These windows can be identified by observing large capital influxes into projects or the presence of a strong and resourceful community. Off-chain analysis, on the other hand, requires the ability to aggregate information and reach out to key influencers within the crypto community. Jack emphasizes that analyzing on-chain information requires a skilled analysis system and an alert mechanism, while off-chain analysis tests one’s ability to gather information and connect with core communities.
The Role of Research Analysis in Bitget:
For a CEX like Bitget, the research analyst plays a crucial role in solving several core problems related to spot trading. Firstly, they need to identify and discover high-quality assets to attract more users. Secondly, they need to provide a variety of trading pairs that create wealth effects. This can be achieved by detecting and capitalizing on opportunities in the market. The research analyst’s value lies in their ability to identify these opportunities early and help Bitget establish connections with these assets. Additionally, they also produce specialized reports and daily market updates to provide valuable insights to crypto traders.
How Jack Joined Bitget and a Day in the Life of a Research Analyst:
Jack’s journey to Bitget was intriguing. His creation of the first on-chain data dashboard for PEPE and other popular assets caught the attention of industry insiders. The team at Bitget reached out to him and offered him a position as a data research analyst. After talking to them, Jack felt that Bitget was much closer to Web3, and everyone there had a deep understanding and passion for the industry. He believes that being surrounded by like-minded individuals who are genuinely interested in the crypto industry provides more opportunities.
Regarding a day in the life of a research analyst at Bitget, Jack summarizes it into three main areas: spot operation, business strategy support, and brand content output. Spot operation involves discovering and mining high-quality assets, followed by evaluating their quality, fundamentals, and team. This ensures that users can gain profits through high-quality projects, resulting in faster user acquisition and increased spot trading volume for Bitget. The research analyst also supports various business strategies within the company, such as regional product operations and growth initiatives. Lastly, they are responsible for producing daily market analysis reports, tracking market trends, and providing useful information to crypto traders.
The Difference Between Research Analysts at Exchanges and Independent Researchers or KOLs:
The main difference lies in the focus and scope of their work. Research analysts at exchanges like Bitget are responsible for spot trading and aim to solve core problems related to asset discovery, user acquisition, and wealth creation. Their work involves analyzing market dynamics and identifying opportunities to support the exchange’s operations. On the other hand, independent researchers or Key Opinion Leaders (KOLs) have a more diverse scope and may focus on various aspects of the crypto industry, such as project analysis, market trends, or specific investment strategies. Both roles play significant roles in providing valuable insights and information to the crypto community.One important point I find crucial is the broader range of information sources. CEX’s Listing Manager has numerous channels and can provide us with excellent projects. It also has access to high-quality projects from VCs, which gives us an advantage in obtaining early-stage information.
Additionally, CEX has its own operational logic and judgment, which further enhances this information advantage. For example, within CEX, you can have a more intuitive understanding of how much valuation a certain asset will reach after listing.
Every platform has its unique resources to ensure its success rate, creating its own information and logic differentials. This may give them an advantage over independent researchers who lack resources.
Deep Tide TechFlow: How do you view a group of “eternal profit bloggers” making investment recommendations? Their success rate seems to be particularly high.
Jack: I usually consider the information density of investment recommendations as a dimension to gauge the popularity of public opinion. There are two key aspects to ensure the success of a project launch: token distribution, which determines the token structure and is crucial for later market operations, and traffic distribution, which directly affects the number of users and funds attracted, making it indispensable in project operations.
Because the majority of participants are in it for the money, the market has created a valid way to attract them through the “eternal profit blogger” persona. Some “eternal profit bloggers” make money from monetizing traffic rather than secondary trading. Therefore, I generally judge the popularity of public opinion based on the density of investment recommendations for a project.
Deep Tide TechFlow: How do you view the trend of CEXs establishing their own research institutes? It seems to have become a standard and a trend. What advantages does Bitget have in this regard?
Jack: I believe this trend reflects how companies are exploring deeper into their core businesses. CEX’s spot and contract businesses can generate substantial revenue for the entire company if operated well during a bull market. To enhance this part of the business, it requires a separate team and resources dedicated to market observation. These individuals need to be familiar with the entire industry, the entire group, and even competitors to specialize and excel in this area. Therefore, I think this trend is foreseeable because it is an important part of the group’s strategic level.
In terms of our specific advantages, I believe the most important point is that Bitget has a comprehensive research institute team. Each member is experienced in their respective fields and possesses impressive industry experience and personal capabilities, which serve as the foundation for collaboration and output.
For example, based on the teamwork mentioned earlier, when a hot topic or event occurs, we can quickly understand the meaning and motive behind it and decide whether to follow or adopt it.
Deep Tide TechFlow: How do you view the meme craze as an ordinary user? What are the ways to “teach a man to fish” and obtain wealth?
Jack: Firstly, the market always needs something to hype. MEME coins are relatively simple compared to other mainstream projects. They don’t require complex storytelling or go through the lengthy process of fundraising, team building, product development, and token issuance. For MEME coins, the only requirements are operational funding and core narrative support, resulting in low listing costs and fast speed.
Most players in the market are driven by the wealth effect, which creates the MEME craze. Therefore, it is ultimately determined by market demand. MEME can be considered the most original part of the fast-paced crypto world. For example, when ChatGPT was popular and Elon Musk mentioned wanting to create Grok, MEME coins related to Grok concepts immediately appeared to meet the market’s speculative demands.
Any event, hot topic, trend, or meme that has a certain amount of traffic and can generate community consensus can be used as the core narrative for issuing MEME coins. Therefore, with a lot of hot money in the market and continuous FOMO sentiment from users, a MEME trend is created.
From a secondary perspective, for a new project, I believe it is essential to understand the core narrative and token distribution logic. The core narrative solves the question of whether the project has sustainable speculative demand in the current market environment. For example, if someone pays close attention to keywords in Elon Musk’s tweets, MEME coins composed of words related to his tweets become a temporary speculative target due to the celebrity’s influence.
At this point in time, with the impending release of ChatGPT version 5 and the rotation of the AI sector, if you discover a project that meets the aforementioned criteria for a core narrative early on, you have a high probability of getting involved. However, it is not a definitive conclusion; it only allows you to judge its core trend, which is likely to last for a period of time.
Once the core trend is determined, you need to assess the token distribution logic. The distribution logic determines the project’s ability to attract users and the attitude of exchanges towards it.
Firstly, you need to evaluate whether its token structure is healthy. For example, some coins distribute airdrops to mobile phone or NFT holders, and you need to realize that this is a way of distributing tokens. By using a portion of users, they can leverage greater traffic and dissemination effects. If the addresses receiving the airdrops belong to high net worth players who are recognized by the market, the project is more likely to receive more resources and promotion, leading to success.
If the token structure is highly concentrated, with the top 10 holders holding 20-30% of the total supply in externally owned accounts (EOAs) rather than contract addresses, there is a considerable possibility of a sell-off.
Furthermore, when participating in secondary projects, especially MEME coins, if you want to achieve relatively significant returns, apart from assessing the core narrative and distribution logic, there are several other important points:
Firstly, build your own list of “smart money.” Although the concept of “smart money” may be overused, publicly available “smart money” lacks alpha value. You need to find your own list of people to follow. Some individuals may not be KOLs, but they openly discuss projects during sensitive periods before listing. These individuals may have access to alpha information, so gradually accumulate attention towards them.
Secondly, always prioritize risk. This includes assessing contract security, whether it is a rug pull, transaction taxes, whether balances can be altered, etc. These checks and judgments must be done, especially when you are eager to invest in a project in its early stages. Another aspect of security is the health of the token structure mentioned earlier; be cautious of the risk of a sell-off.
Thirdly, find your own milestones for selling. Deciding when to sell is a challenging task, and it requires your own expectations. For example, you can sell some tokens when there is positive news or when it gets listed.
Lastly, from recent trends, I believe the AI sector will be relatively strong, and there is a clear effect in sector rotation. Investing in individual MEME coins carries greater risk, so I personally share less about them. Interested readers and listeners can daily follow the Wealth section in our Bitget research institute’s publication, where you can find more valuable information to help with decision-making and judgment.
In the era of super individuals, both the talent scouts and the talented individuals contribute to each other’s success.
In conclusion, individuals with significant capabilities can unleash powerful potential and achieve success in their respective fields. At the same time, super individuals still require the injection of resources and a larger platform to have a broader space for influence, impacting more people and pursuing greater achievements. Correspondingly, top organizations need to give sufficient respect and space to super individuals, allowing them to shine in suitable positions, achieving a win-win situation for organizational interests and individual value.
Head CEXs like Bitget are undergoing a “sublimation reaction” similar to the physical world: absorbing heat from the surroundings and attracting talented individuals to the team to accumulate potential energy for identifying high-quality assets. On the other hand, excellent crypto talents, with the help of better platforms, are undergoing a “condensation reaction”: radiating heat to illuminate the path of every explorer in the crypto dark forest with knowledge and advice.
