There are quite a few companies operating in the cryptocurrency trading space offering various trading signals or insights. Sitting in the Telegram channels for some of these companies has shown me that it's not always clear what the differences and similarities are.
For example, is CoinFi a RedPulse competitor? Is Enigma a Cindicator competitor? Are they all in direct competition or do they complement one another?
This article is going to talk about some of the overlaps between the various projects, and some of the differences, as well as giving you a general overview of how and where they all fit into the space.
We're mostly going to look at Santiment, Cindicator, Enigma, and Coinfi. The first three have already completed ICO's, and CoinFi has one coming up. Presale starts January 15.
We'll probably mention a few other companies along the way too, such as we've done with Redpulse.
Why this post at all?
We're pretty bullish on the idea that as the cryptocurrency space matures in 2018 and more and more institutional money arrives, the demand for trading software will grow rapidly. As of right now, there isn't anything of the caliber that Wall Street itself uses (such as the famous Bloomberg terminal), although CoinFi in particular are aiming to plug that hole.
So while the vast majority of everyday crypto traders don't really rely on signals or algorithms to affect their decisions, we feel this is going to change in 2018. As more money flows into crypto, it will become more competitive, and therefore harder to find the best deals.
We've also recently started an ongoing series about finding under the radar coins, and we think these projects will help with this.
Before we look at each project mentioned, let's give a quick overview of some of the different things the projects are offering, and what they mean.
Also, feel free to subscribe to our newsletter to get updates on all of these projects and more trading strategies.
Datafeeds, CrowdSourced, Signals and Algorithms
A datafeed is probably the easiest feature to understand. Coinmarketcap.com is a good example of datafeeds. They gather data from the majority of crypto exchanges and display the pricing for us to read easily.
With crypto trading platforms, datafeeds are a bit more in-depth, but essentially work the same way. CoinFi for example, use datafeeds to display the current pricing of particular tokens, as well as historical data and trade volume.
Santiment use datafeeds to display up to date information on the majority of blockchains.
Moving on to "crowdsourcing", this is the act of using opinions or analyses of many different people to create data. For example, Cindicator asks all of its users to predict the price of a coin in the next few months. Using the average price of every user who votes, you get a crowdsourced price prediction.
CoinFi on the other hand, will have a content platform where users can contribute insights and analyses about cryptocurrencies and be rewarded in COFI tokens. The end result is crowd-sourced news and analytics for everyone to benefit from.
Now when we talk about trading signals, some of these are created with code, bots, or algorithms, and others are crowdsourced. Essentially a trading "signal" is a notification that there could be an opportunity to perform a certain trade.
For example, both Cindicator and CoinFi will have arbitrage signals, which will notify users when an opportunity to create an arbitrage trade exists. It won't actually perform the trade for them.
Volume spikes are also an example of a trading signal. If you're monitoring a particular coin and it suddenly has a surge in volume, that is a good signal for you to dig deeper and decide whether or not to place a trade and benefit from the surge in volume.
So when it comes to algorithms, these are a step up from signals. A trading algorithm allows you to automate a trade. This could be based on a signal, or a string of signals matching up with other conditions. While you may think of this as a bot, an algorithm works differently. Enigma Catalyst and CoinFi are both projects working on trading algorithms, as we'll explain below.
As you may have guessed, using crowdsourced analyses as well as wall street caliber trading intelligence and tools is going to give everybody an edge. Not only that, but it may become essential in the future in order to avoid being left behind.
So with that in mind, let's take a look at what's on offer, and how exactly you could use them.
Santiment completed their ICO in July, and in recent weeks have seen their market cap soar to over $300 million at the time of writing. Much like similar projects in the space, traders are starting to catch on that this is an area of crypto with a lot of room to grow.
Similar to Cindicator, Santiment focus on datafeeds, crowdsourced sentiment insights, and newswires.
What that means in practical terms is that Santiment offers datafeeds pulled from all major blockchains, as well as curated content feeds, so you can see what influencers are saying about projects, and "sentiment feeds" allowing you to gauge what the community is saying and watch hype as it builds.
This is definitely a useful platform to have access to, because many times when a coin "moons", you can see the hype building shortly before the major move happens. By being able to get instant access to these sentiments, as well as having access to data about the projects themselves, the savvy trader will be able to jump on moves early enough to benefit from them, rather than chasing them and ending up out of pocket.
So essentially Santiment focuses predominantly on data feeds, market sentiment, and crowdsourced/curated content.
They're working with some other large projects as well, such as Cofoundit and Iconomi.
Next up is Cindicator, who completed their ICO in September and have also seen some good momentum of late. Currently they have a market cap of $120 million.
Cindicator themselves have some overlap with Santiment, but also offer more signals.
The first thing Cindicator launched is a "Collective Intelligence" platform, where users can give their opinion on things such as price movement, future price predictions, and reap rewards for their accuracy. Users who have more historical accuracy will also have higher weighting given to their predictions, which then creates a robust crowd-sourced prediction platform. In other words, by aggregating the predictions of all those using the platform, Cindicator can create more accurate predictions for everyone to benefit from.
Those who are in the top ranks for predictions will be rewarded CND tokens for their efforts.
On top of that, Cindicator have also developed two main bots. The purpose of the bots is to give trading signals to those who have access. One example is an arbitrage signal, which notifies users when there are price discrepancies between exchanges, allowing for risk-free profits to be attained.
The downside is that access to these bots comes at a very high price, which makes it almost useless for the average trader to try to access.
Over time, Cindicator will roll out even more bots, but the question of whether or not they can benefit the masses still remains.
Enigma, another project that launched in September and has a very similar marketcap to Cindicator.
It's a little harder to explain exactly what Enigma Catalyst does, but essentially it focuses more on trading strategies and algorithms, as well as backtesting for both.
In their own words:
Powered by our cryptofinancial data marketplace, Catalyst empowers users to share and curate data and build profitable, data-driven investment strategies. You can also immediately execute your strategies on major exchanges using Catalyst’s live trading tools.
So essentially, Enigma Catalyst provides actual trading tools, compared to Cindicator and Santiment which focus more on signals.
It definitely has a lot of potential and a solid team behind it, but when clicking the "Try Catalyst" button on their homepage, the average trader will probably stop there. Catalyst currently is not user-friendly and requires a lot of knowledge of code.
This is the opening paragraph of the "Beginner tutorial".
There's little doubt that Catalyst can perform some powerful strategies and algorithms, but the average person is just not going to be able to understand, let alone use them.
We're looking forward to watching this project develop though, because it has a great team, and if it can become more user-friendly, it could benefit a lot of people. Right now though it is clearly aimed for people with algorithmic experience and the skillset and desire to build trading software.
So it's clear to see here that Santiment, Cindicator, and Enigma Catalyst are targeting slightly different audiences, or offering different solutions for them.
Let's look at CoinFi, who are yet to start their crowdsale, but have a growing amount of hype and excitement around them.
CoinFi has been flying under the radar for a while in terms of hype around their ICO, but we've noticed a lot more people talking about it recently, particularly in telegram and discord groups.
It's one we're definitely planning to contribute to (we also participated in Enigma and Cindicator crowdsales).
We like it because they're aiming to tackle a lot more problems than the above mentioned companies, and will also be accessible to the every day trader.
Being billed as the Bloomberg terminal of crypto, Coinfi are planning to introduce trading signals, trading algorithms, crowdsourced analytics and insights, and peer reviewed content.
If you're reading this and thinking, isn't RedPulse supposed to be the Bloomberg of crypto? The answer is kind of, but RedPulse only focus on Chinese news, rather than the whole world. Redpulse also focuses mostly on stocks.
Essentially they'll be a mixture of SeekingAlpha, where experts can submit content and analyses on projects and be rewarded for its quality, and also a platform with various trading tools as mentioned above.
We first mentioned CoinFi in this article about arbitrage. While their arbitrage signal is something Cindicator are also offering, the CoinFi one will be much more accessible and will not cost an arm and a leg.
The way CoinFi works is as follows:
- Users would stake COFI tokens in order to gain access to the platform
- Certain elements of the platform will require premium access and auctions
- COFI tokens will also be paid to content creators as a reward for their content's quality
As such, we can envision CoinFi becoming the go-to platform for cryptocurrency traders.
You'll be able to read quality content which is moderated and rewarded, so you won't have to rely on Reddit or Medium anymore.
You'll also be able to access the signals and tools that Cindicator and Santiment offer, but it won't cost you a huge amount of tokens to access.
We don't believe it matters that other projects have a head start, because CoinFi has enough of a unique offering to gain traction regardless.
So Which One Is Better?
With all of these projects, the question remains as to whether or not any of the teams can pull off their targets. Discussing their roadmaps and teams is actually beyond the scope of this article, as we instead wanted to clarify some of the differences in their fundamental ideas.
That said, we believe that each project has a strong team with experience in their fields, and would be happy to back any of them.
It's clear that in many areas there is overlap, but each project also has a lot of uniqueness to it.
You should definitely check out CoinFi in more details though.
All of these projects are flying relatively under the radar compared to other projects, but they have a lot more utility, and we feel bullish that they will ultimately be valued a lot higher.
They'll also help you trade better, which is nice too.
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