Article Rewrite:
Title: The Role of Research Analysts in the Cryptocurrency Industry: A Conversation with Bitget’s Chief On-Chain Analyst
Introduction:
In recent years, it has become a trend for cryptocurrency exchanges (CEX) to establish their own research institutes and build research teams. The competition in research and analysis ultimately comes down to the competition for talent. Excellent talent and in-house research are essential for analyzing the dark forest of the blockchain, identifying potential assets in advance, guiding cryptocurrency investors, and laying the groundwork for listing and secondary strategies. In addition to independent analysts, what kind of expertise do CEX research analysts possess? In this article, we have invited Bitget’s Chief On-Chain Analyst, Jack, to share his insights and experiences in the field of research and analysis.
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Interviewer: Jack, could you please introduce yourself briefly and tell us how you entered the world of Web3 and cryptocurrencies?
Jack: I originally came from a technical background and worked as a data developer and analyst at a Web2 financial software company. My entry into the world of cryptocurrencies happened by chance. A friend told me about mining ETH using graphics cards, so I started mining ETH with my idle machines at home, and the returns were good. As I accumulated more and more ETH, around 2021, I started participating in some secondary market activities. It was during the boom of GameFi and the animal-themed market that I made my initial profits. So, initially, I saw an opportunity in this industry and gradually accumulated experience and knowledge from Web2 to Web3. Looking back, it has been an interesting journey.
Interviewer: How did you make your first fortune in cryptocurrencies? Do you have any notable achievements in this current bull market that you can share?
Jack: My first fortune came from the previous GameFi market boom. There was a game called RACA MetaBeast, and I invested less than $1,000 in it. As the price skyrocketed, I made over 1 million RMB within a month. However, at that time, my understanding of the project and its mechanics was limited. Many times, I blindly invested without much knowledge, and sometimes I managed to catch opportunities with tenfold or hundredfold returns. However, due to my lack of knowledge, I lost some of the profits during the process. Now, our research and analysis approach has evolved significantly, and I can discuss it in more detail later. In terms of results, for BOME and PEPE in this market cycle, if we calculate the average increase from the moment I discovered them to their peak, it would be around 35-40 times. You may not always capture the complete rise, but with a systematic analysis method, you can capture a portion of the profits during the upward trends.
Interviewer: Do you think your experience in data analysis in Web2 has been helpful in generating these profits? How does one become a qualified Web3 researcher?
Jack: The biggest difference between Web2 and Web3 data analysis lies not in the data itself but in the business aspect. Web3 data is very direct and is all about “money.” Therefore, your analysis should focus on three key questions: where is the money, where is the money flowing, and who is most likely making money? These three different questions require different analysis tools and approaches. They are not highly correlated with Web2 data analysis but require an understanding of the business logic. For example, when you analyze contracts on Uniswap, you need to identify the flow of funds, understand the underlying form of on-chain data for each transaction, and analyze the behavior and intentions of those controlling the contract address. This analysis supports your trading decisions. In summary, having experience in Web2 data analysis, coupled with an understanding of Web3 business, is crucial for effective data analysis.
Interviewer: How do you manage to discover and identify data earlier than others? As the first person to establish the PEPE on-chain data dashboard, do you have any experiences to share?
Jack: The first step in discovering and identifying popular assets is through mining. I believe early discovery and identification can be approached from two dimensions: on-chain and off-chain. On-chain, every investment activity generates an on-chain result. More importantly, short-term on-chain dynamics can be seen as windows of opportunity. For example, in the case of a popular asset, its early distribution is likely to involve influential individuals or events, either backed by a large team or with significant funds. For instance, a good project on Solana may attract a pool of funds exceeding one million US dollars, indicating strong financial support. Therefore, the creation of such a pool requires mining and the ability to detect it as soon as it appears. You can observe that there are many high-net-worth addresses continuously buying within the first half hour of the initial block, indicating early on-chain activity. Another approach involves projects with abundant resources but not necessarily huge funds. For example, having a large community or a strong consensus within the community offline, or having high-quality promotion channels, such as sharing information in small alpha communities. On-chain information is more transparent, but it requires analytical skills and an effective alert system. Off-chain analysis, on the other hand, tests your ability to aggregate information and reach core circles of promotion.
Interviewer: In what ways do you think your research and analysis contribute to a cryptocurrency exchange like Bitget? We are also curious about what a typical day looks like for a research analyst at an exchange.
Jack: For a CEX to operate its spot trading business, several core issues need to be addressed. First, users need to find the assets they are looking for on the exchange. Second, the exchange needs to offer “high-quality” trading pairs that generate wealth effects. This is how they attract more users. Therefore, our early research and analysis work focuses on being the first to detect popular assets so that the CEX can engage with them at an early stage. Every token has a time and traffic window. In the face of fierce market competition, acquiring users and assets during this window period to drive the growth of the CEX’s spot trading business is where the value of our research lies. Additionally, we also provide a specialized “Daily Wealth Report” to track daily market trends and dynamics, providing useful insights for cryptocurrency investors.
Interviewer: How did you become associated with Bitget? We are also interested in knowing the daily routine of a research analyst at an exchange.
Jack: The process of getting associated with Bitget was interesting. I had previously created on-chain data dashboards for PEPE and other popular assets, which attracted attention within the industry. The people at Bitget reached out to me to see if I could join them as a data analyst. After our discussions, I had a strong impression that Bitget is closer to Web3. The team members are very familiar with and knowledgeable about the industry, and they genuinely care about the daily events and trends in the cryptocurrency industry. For example, one of the well-known MEV bots on Ethereum was called JaredfromSubway. My colleagues even delved into the origin of this name, speculating that it might have been inspired by the author’s moment of enlightenment after eating at Subway. This made me feel that everyone genuinely finds this industry interesting and has a passion for it. So, I believe that when a group of like-minded people focuses on this industry, there are more opportunities. As for the daily routine, it can be summarized into three main aspects: spot trading operations, which involve discovering and mining high-quality assets; supporting business strategies, such as assisting with internal operations or regional product growth; and brand content output, which includes analyzing wealth-building opportunities, market trends, and competitor analysis reports, and regularly publishing content that the market and users are interested in. That’s a typical day for a research analyst.
Interviewer: What differentiates a research analyst at an exchange from an “independent researcher” or KOL online?
JI believe it is important to have a broader source of information.
CEX’s Listing Manager has many channels and can also recommend us some good projects. It also has access to high-quality projects from VCs, which gives us an advantage in obtaining information at an earlier stage.
In addition, CEX has its own operational logic and judgment, which further enhances this information advantage. For example, it can provide a more intuitive sense of how much valuation a certain asset will reach after listing.
Each platform has its unique resources to ensure its hit rate and form its own information and logic gaps, which may give it an advantage over independent researchers who lack resources.
TechFlow: What do you think of a group of “always profitable bloggers” making investment recommendations? It seems that their success rate is particularly high.
Jack: I usually consider the information density of investment recommendations as one dimension to judge public sentiment. There are two key things needed for a project to have a better launch: token distribution, which determines the chip structure and is crucial for later market operations, and traffic distribution, which directly affects the number of users and funds that can be attracted, and is essential in project operations.
Since the majority of players are here to make money, the market has created a popular image of “always profitable bloggers” as an effective way to attract attention. Some of these “always profitable bloggers” monetize their traffic rather than engage in secondary trading. Therefore, I generally judge the popularity of public sentiment based on the frequency of investment recommendations for a project.
TechFlow: What do you think of the trend of CEXs establishing their own research institutes? It seems to have become a standard and a trend. What advantages do you think Bitget has in this regard?
Jack: I think this trend reflects that companies are exploring deeper into their core businesses.
CEX’s spot and contract businesses can generate significant revenue for the entire company if operated well during a bull market. Therefore, in order to improve this part of the business, it is necessary to separate a group of people and resources to specifically observe the market. These people need to be very familiar with the industry, the entire group, and other competitors in order to do better. So, I think this trend is foreseeable because it is an important part of the group’s strategic level.
In terms of our own advantages, I believe the key point is that Bitget has a comprehensive research institute team. Each member is experienced in their respective fields and has strong industry knowledge and personal abilities, which serve as the foundation for collaboration and output.
For example, based on the teamwork mentioned above, when a hot topic occurs, we can quickly understand the meaning and motives behind it and decide whether to follow or adopt it.
TechFlow: How do you view the meme craze as an ordinary user? And what are some ways to “teach people to fish” to obtain wealth?
Jack: First of all, the market always needs some speculative targets, and meme coins are relatively simple compared to other mainstream projects. They do not require complex stories or the lengthy processes of fundraising, team formation, product development, and token issuance. For meme coins, all that is needed is the operation of funds and the support of a core narrative, making their listing cost very low and the speed very fast.
The mentality of most players in the market is to chase after wealth effects, which creates the meme craze. So, overall, it is market demand that determines it. MEME can be considered the most original part of the fast-paced crypto world. For example, when ChatGPT became popular and Elon Musk mentioned Grok, meme coins related to the keywords mentioned by Musk immediately emerged to meet the market’s speculative needs.
Any event, hot topic, viral meme, or emoticon, as long as it has a certain level 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, the meme wave is created.
From a secondary perspective, for a new project, I believe it is important to understand its core narrative and token distribution logic.
The core narrative solves the question of whether the project has sustained speculative demand in the current market environment. For example, if someone pays close attention to keywords in Elon Musk’s tweets, meme coins consisting of words related to what Musk said become a temporary speculative target due to the influence of the celebrity’s traffic. In this case, there is a correlation between A and B words, and it becomes a phase-specific speculative target.
At the current time point, with the upcoming release of ChatGPT version 5 and the rotation of the AI sector, if you discover a project that meets the above conditions for a core narrative, there is a high probability that you have the opportunity to get involved. However, it cannot be concluded with certainty, but you can judge its core trend and expect the hype to continue for a period of time.
After determining the core trend, you need to assess the token distribution logic.
The token distribution logic determines the user base that the project can attract and the attitude of exchanges towards it.
First, you need to assess whether its chip structure is healthy. For example, some coins give airdrops to mobile phone/NFT holders, and you need to realize that this is actually a way to distribute chips, using a group of users to attract more traffic and spread the effects. If the addresses receiving the airdrops are high net worth players recognized by the market, there is a greater chance that the project will receive more resources and promotion, leading to success.
If the chip structure is highly concentrated, with the top 10 holders holding 20-30% of the total supply in their EOA addresses (addresses held by individuals rather than contracts), there is a high possibility of a sell-off.
In addition, when participating in secondary projects, especially meme coins, if you want to obtain substantial returns, besides assessing the core narrative and distribution logic, there are several important points to consider:
First, build your own list of “smart money.” Although the concept of smart money may be overused, publicly available smart money does not have alpha value. You need to find your own list of people to follow. Some of them may not be KOLs, but they openly discuss projects before they are listed, which means they may be insiders with alpha information. Gradually accumulate your continuous attention to these individuals.
Second, always prioritize risk. For example, assess the security of the contract, whether it is a scam, transaction taxes, and whether balances can be manipulated. These aspects need to be checked and judged, especially when you are eager to invest in a project at an early stage. Another aspect of security is the health of the chip structure, so be cautious of the risk of a sell-off.
Third, find your own milestone selling points. When to sell is a difficult thing to standardize, and you need to have your own expectations. For example, if there is good news about a project, you can sell some of your holdings, or you can choose to sell when it is listed.
Finally, looking at recent trends, I believe the AI sector will be relatively strong, and there is a clear rotation effect in sectors. Investing in individual meme coins carries higher risks, so I personally share less about them. Interested readers and listeners can daily follow the Wealth Section Daily Report published by our Bitget Research Institute, which provides more valuable information to help with decision-making and judgment.
In the era of super individuals, talent and organizations mutually achieve success.
In the final interview, we realized that Web3 super individuals like Jack have greater potential energy.
Highly capable individuals can unleash strong momentum and achieve success in their respective fields. At the same time, super individuals still need the injection of organizational resources to have a broader platform to make a greater impact, influence more people, and pursue greater achievements. Similarly, top organizations facing super individuals need to show sufficient respect and space, allowing them to shine in suitable positions, achieving a win-win situation for both the organization and personal value.
Top CEXs like Bitget are undergoing a “sublimation reaction” similar to the physical world: absorbing heat from the surroundings and attracting talents to the team to accumulate momentum for identifying high-quality assets.
Meanwhile, excellent crypto talents, with the help of better platforms, are undergoing a “condensation reaction”: radiating heat to the surroundings, illuminating the path for every explorer in the crypto dark forest with knowledge and advice.
