Disclaimer: In the name of full transparency, please be aware that this blog post contains affiliate links and any purchases made through such links will result in a small commission for me (at no extra cost for you).
NOTE: Token Metrics is an amazingly vast platform in terms of analytics, and they're constantly updating their software. As a result, this review will be periodically updated to give greater insight into their new features, as well as give better explanations to their many points of analysis.
During the 2017 Bitcoin bull market, the ICO craze took the world by storm. Many people earned exponential gains on their initial investments and spread the word. One of the people who gained most from this was former IBM Watson team member Ian Balina.
Throughout 2017, Ian grew a large following on Instagram and Youtube, reviewing projects and introducing his audience to new crypto projects that would later moon.
Those, including myself, who watched and followed Ian witnessed him grow his portfolio from $22,000 to over $5 million.
An integral factor in this was his world-famous spreadsheet, where new projects would be added and graded based on their team, code, fundamentals, and what Ian referred to as 'token metrics.'
Today, Ian has expanded upon this, taking his spreadsheet to the next level, and spinning his coined term into a crypto analytics platform. Today, we'll review Token Metrics, its team, and the overall use case; to then determine how much it's worth it for you to use it. Before we go any further, it is important to understand Token Metrics should be used as a research tool and is not a platform that gives financial advice.
Let's start with the background. Ian's original portfolio used mathematical and statistical models to analyze crypto investments. Its main point of reference would be its grading system, which would help its subscribers determine whether a project was worth researching further or not.
Today, Token Metrics uses a similar, but way more advanced model of analytics. In a recent email, the Token Metrics team compared their system to Google's AlphaGo AI project. This system learned to perform tasks by considering examples, usually without being programmed with task-specific rules.
AlphaZero became a smashing success because it did not need to be taught by humans, instead of using examples to then play against itself, and learn on the fly. This is called reinforcement learning using neural networks. The results of Google's AlphaZero was it winning 100 straight games of Go against the original AlphaGo project.
Token Metrics follows in Google's footsteps, using deep learning neural networks to consistently improve its cryptocurrency grading systems. A neural network is a software program or algorithm that mimics the human brain, simultaneously interconnecting and processing information while learning from past patterns and adapting accordingly.
While this sounds complicated, the platform is very easy to understand. The caveat is its vastness, but in this review, we'll break down every aspect so you'll know how to use the platform to make better crypto decisions.
Token Metrics has two major features: Indices and Ratings. Indices give the ability to determine what makes the most sense from an investment or trading perspective, within a given timeframe. The factors weighed into indices are whether you are a trader or investor, the time horizon in which you're interested in capitalizing on, and what exchanges you would trade on between Binance, Coinbase, Kraken, Uniswap, and Kucoin.
Let's first break down the Index Selection:
If you're looking to be more active in crypto, the Trader option may be for you. It is important to understand though, that trading is very difficult and takes time to master. It is not recommended by most experts with even Binance CEO CZ Zhao explaining how he never recommends trading.
Looking at Token Metrics especially, you'll see the potential gains predicted by the algorithms are not very favorable for day traders. In terms of time horizons, Traders may choose between daily and weekly indices; while Investors can choose between monthly quarterly, and yearly. The Investor option seems more ideal for beginners and passive investors more interested in dollar-cost averaging and the trader option ideal for experienced day traders seeking an edge on the crypto market.
Every option creates a basket of cryptocurrency recommendations called the Index Allocation, which is updated periodically. The Trader Index Allocation is updated every day for the Daily Index and weekly for the Weekly Index, at 7:20 PM EST. The Investor Index Allocation is updated every month at the same time, regardless of whether it is Monthly, Quarterly, or Yearly. These allocations are done based on if a person invested $10,000, but you can alter it accordingly to the amount you are prepared to invest.
If you have a specific exchange that you prefer, Token Metrics will send you an allocation specific to that exchange, which is a fantastic new feature of TM. This allows beginner investors to start small and large scale investors to hedge the market between every exchange, assuming they're in a country in which all 5 exchanges are available. If you're based in the US, Binance is no longer available to you because of the government's regulatory attempts to force exchanges to expose the identities of people who use crypto exchanges.
After this Token Metrics shows its users a graph of the overall performance of their Index versus Bitcoin. Usually, it follows BTC's behavior on the market, but at the time of writing, the daily trading index took a sharp dip, hence why most pros and influencers recommend against day trading.
From there, we have an individual breakdown of each recommended crypto, showing its current ROI, price, portfolio percentage(or weight), initial cash value, current cash value, and the number of tokens bought and HODL'd.
Token Metrics also tracks your trading performance, as you record transactions, recording how much you bought and dynamically updating the BTC and ETH price at the time you made your investment.
If any of this gets confusing to you, Token Metrics also has a group of Tutorials. These tutorials, filled with FAQs, videos, and best practices to ultimately become more adept at making better investment decisions with the platform.
In the Ratings tab, you'll find a list of the top 20, 100, or all coins, depending on what subscription you've purchased. Similar to the Indices, users have the option to choose between Trader or Investor; with Daily and Weekly grades for Traders, and Monthly, Quarterly, and Yearly grades for Investors.
Token Metrics' ratings are based on AI machine learning. The rating system (out of 100) takes root from the famous spreadsheet Ian created in 2016, which we mentioned in the beginning of this review. These ratings indicate whether a cryptocurrency is a good option to buy or sell. Ratings are always changing, so if one is to use it, it should be visited periodically, based on their trading style.
The short term trader grade is based on testing 20 million models a day for all cryptocurrencies and finding the best-performing weights for all data points measured across fundamentals, technology, technical analysis, and overall grade. The long term investor grade is based on an average of the previously mentioned, only updated in a longer time frame.
Clicking onto a selected coin will bring you into that coin's Token Metrics. This 5 key metrics in their grading structure: fundamentals, technology, technical analysis, performance metrics, and correlation.
The Markets section shows the pricing data of the selected cryptocurrency, the exchanges it is being traded on, as well as the trading pair, volume, and how recently the last trade was made.
They also have Price Predictions and the ability to follow a project and receive email and text updates, but this is only available to Investor and Professional subscribers. Once I upgrade my account, that section will be reviewed as well.
Fundamentals consist mainly of a cryptos ROI, Initial Price, Market Cap, Circulating Supply, 24 HR Trading Volume, and how many exchanges it is sold on. It also features the analytical points of:
Alpha: Measure of the excess return of an asset compared to Bitcoin
Beta: Measure of how an asset responds to a move in Bitcoin's price
Max Drawdown: Maximum observed loss from a peak to a trough of the asset, before a new peak is attained
Time Underwater: The time the asset has been out-of-the-money (i.e. negative)
Turnover Rate: The percentage of total market cap that is traded every day
The Technology point scores a project's Github Repository, Innovation, Architecture, Code Quality, Mainnet, Usability, & Team to provide a score out of 55 points.
The Technical Analysis point indicates whether a coin is either Bullish, Bearish, or Neutral. Usually, it is recommended by many to zig when others zag, but Token Metrics does this in advance, aligning with the maverick thinking that has made many people successful in trading and asset investing.
If you have Vantum's Crypto Dictionary, you should already know what Bullish and Bearish mean, but I will still explain it in reference to using these indicators in Token Metrics.
Bearish defines a market on a downward trend.
Neutral defines a market neither bearish nor bullish, waiting for a confirmation or a trend reversal.
Bullish defines a market evolving in an upward trend.
For those who subscribe to the Investor or Professional subscriptions, price predictions and TA ratings are Two totally independent models that analyze different things. Price predictions only look at price data, not technical indicators while the TA Rating models only look at Technical Analysis indicators.
The Performance Metrics sections bring you an array of key performance and investment metrics, first showing returns against Bitcoin, how returns perform daily, and many other charts that will be daunting at first, but make more sense as you research and continually use Token Metrics. This section is so vast, I'll have to set out a day to do a full breakdown of each metric. The amount of data in Token Metrics will give you more than enough technical research, though you should still DYOR as much without TM as possible.
Finally, there is the Correlation section which measures the degree to which two cryptocurrencies move with each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0. A perfect positive correlation means that the correlation coefficient is exactly 1. This implies that as one cryptocurrency moves, either up or down, the other cryptocurrency moves in lockstep, in the same direction.
A perfect negative correlation means that two assets move in opposite directions, while a zero correlation implies no relationship at all.
Community & Team
Token Metrics also has a growing community with a forum and weekly show live streaming every Sunday at 6 PM EST. They also will do interviews with leaders of certain crypto projects, for example with Bancor's, and have their Crypto Roundtable, which usually features Youtubers Bitboy, Crypto Love, and Coach K.
Their team consists of seasoned veterans in the finance and tech space:
William (or Bill) Noble, TM's Chief Technical Analyst is who you'll see most of besides Ian, as he's always on the weekly live streams. Noble is a Wall Street vet with over a decade of experience at Goldman Sachs as a financial market thought leader. He's also worked at Charles Schwab and Morningstar and with notable crypto figure Charlie Shrem. Check out his interview on Kitco News below:
Another notable member of the team is Paresh Masani. Masani, who serves as Token Metrics' Chief Technology Officer, is another Goldman Sachs alum who worked as their IT Executive Director.
Masani also worked with JP Morgan Chase and with Barclay's on their mobile payments platform.
With two very experienced execs from one of the largest investment banks in the world and Ian's background at IBM, it's safe to say Token Metrics has an all-star team that's only growing in size.
Features I'd love to see added to Token Metrics
Bulk Holdings Upload and API Integration - For those who begin using Token Metrics, but are experienced and have made multiple trades, this is a feature I think is key. Presently, you can only add your holdings one by one, which is tedious when you've been dollar-cost averaging one coin over an extended period of time and want an accurate analysis of how much you've invested and your total profit.
Time Of Day Added To Investment Date - To make your portfolio analysis even more accurate, it would be awesome for Token Metrics to also allow users to input the time they invested in the investment their adding.
Exchange Used In Investment - Since Token Metrics is pulling data from the top five crypto exchanges in the world, I'd like to see this also added as each exchange has different prices and will allow for an even more accurate read on your personal portfolio performance.
For new users, Token Metrics offers a 7 day trial for as low as $1.99. Sign up here to test drive Token Metrics for yourself.