The Why

Saving Crypto Users From Chaos With Superpowered Data Insights

The global cryptocurrency market has witnessed unprecedented growth, with its market capitalization surpassing $2.5 trillion in 2024. It is estimated that more than 500 million people already own crypto. With the pace of adoption growing, hundreds of millions more will join the space in the near future.

This growth is driven by several key factors, including increased institutional adoption, the rise of decentralized finance (DeFi) platforms, and the proliferation of non-fungible tokens (NFTs).

Key Growth Drivers:

Institutional Adoption: Institutional investors have significantly increased their holdings in cryptocurrencies, driven by regulatory developments such as the approval of Bitcoin ETFs. This regulatory clarity has encouraged broader participation from traditional financial institutions.
DeFi Expansion: The total value locked (TVL) in DeFi has seen substantial increases, reflecting growing interest and investment in decentralized financial products. For instance, DeFi derivatives volumes reached new highs, indicating robust infrastructure development in this sector.
NFT Market Resurgence: After a period of consolidation, the NFT market has rebounded, driven by new collections and innovations in token standards. Monthly NFT trading volumes have seen steady growth, highlighting the sector's resilience and potential.
Technological Innovations: Advancements in blockchain technology, such as the development of Layer 2 solutions on Ethereum and the rise of specialized blockchain networks like Solana and Polygon, have enhanced scalability and reduced transaction costs, attracting more users and developers.

Key Challenges

However, despite the remarkable growth and promising developments, the cryptocurrency market also faces significant challenges. While the market's expansion has opened up new opportunities, it has also brought to light issues that need addressing to ensure sustainable growth and investor protection.

Some of the primary challenges include:

Misinformation and Scams

The cryptocurrency market is plagued by misinformation and scams, with numerous instances of fraudulent projects and unreliable influencers misleading investors.

In 2023, consumers lost more than $10 billion to fraud, with over $4.6 billion lost specifically to investment scams. This marked a 21% increase over 2022.
Cryptocurrency-related investment fraud losses surged by 53%, from $2.57 billion in 2022 to $3.94 billion in 2023.
Phishing schemes were the most frequently reported crime in 2023, with over 298,000 complaints filed, about 34% of all reported complaints.
Romance scams involving cryptocurrency led to significant losses, with at least $374 million in suspected stolen crypto reported in 2023.
The Internet Crime Complaint Center (IC3) received nearly 800,000 complaints in 2023, with reported losses totaling $10.3 billion.

The list goes on and on.

Siloed Unstructured Data

While massive amounts of data reside on the blockchain and are accessible through numerous tools, even experienced crypto users find it challenging to quickly derive clear, actionable insights.

Additionally, the cryptocurrency market is influenced by macroeconomic trends, market sentiment formed on social media platforms like X, technological developments, regulatory and legal news, and various other factors.

The current state of data accessibility and in-depth analytics lacks effective tools for understanding market movements and making informed decisions.

Market Volatility

Market volatility is one of the most defining characteristics of cryptocurrencies. Unlike traditional assets like stocks or bonds, cryptocurrencies experience significant price swings, often within very short time frames. These fluctuations are driven by a variety of factors, including market sentiment, regulatory developments, and broader macroeconomic conditions.

A notable example of market volatility occurred during the crypto boom of 2021. Prices across the market surged, largely fueled by retail investor enthusiasm, institutional interest, and the mainstream adoption of digital assets. For instance, Bitcoin hit an all-time high of nearly $69,000 in November 2021, only to experience a sharp decline in the following months, dropping nearly 50% by early 2022. This steep drop reflected broader economic concerns, such as rising inflation and interest rate hikes, combined with increasing regulatory scrutiny worldwide.

Another striking case was the dramatic rise and fall of Dogecoin. Originally created as a joke, Dogecoin’s price surged by over 10,000% in 2021, largely due to social media hype and high-profile endorsements. However, this meteoric rise was unsustainable, and by mid-2022, Dogecoin's value had collapsed by 90%, highlighting the fragility of hype-driven assets in the volatile crypto space.

The collapse of Terra (LUNA) in 2022 serves as a further reminder of the risks associated with cryptocurrency investments. Terra's price crashed from over $100 to virtually zero in just a few days, triggered by the failure of its algorithmic stablecoin, TerraUSD (UST). This event sent shockwaves throughout the market, leading to widespread losses across the entire sector and underscoring the interconnectedness of digital assets.

Market volatility, while presenting opportunities for substantial gains, also poses significant risks. Many investors, especially those new to the cryptocurrency market, often struggle to navigate these rapid price changes. Surveys indicate that around 90% of crypto investors are concerned about the high levels of market volatility. This unpredictable nature can result in large losses, particularly for investors who may not fully understand the factors driving these swings.

Regulatory Uncertainty

While regulatory clarity is improving, inconsistencies across different jurisdictions continue to pose challenges. The SEC's approval of Bitcoin ETFs in the U.S. has been a positive step, but regulatory frameworks in other regions remain unclear or restrictive.

This diverse regulatory landscape presents a significant challenge for global crypto exchanges. They must navigate a complex array of laws and regulations that vary dramatically from one jurisdiction to another.

European Union: Moving towards a harmonized regulatory framework with the proposed Markets in Crypto-Assets (MiCA) regulation.
United States: Approaches crypto regulation through a patchwork of state and federal laws, creating a complex environment for exchanges like Binance.
High Uncertainty Regions:
- India: Experiences ongoing uncertainty with fluctuating policies; the government has oscillated between banning cryptocurrencies and proposing regulations to govern them.
- China: It has imposed strict bans on cryptocurrency trading and mining, yet it sporadically considers blockchain technology and its potential applications in other sectors.
- Russia: This country presents inconsistent regulatory approaches, including recent considerations of legalizing cryptocurrency mining while maintaining stringent controls on trading and usage.

Hacks and Security Challenges

The user experience in the cryptocurrency market often leaves much to be desired. Various crypto service providers get hacked on a constant basis. Users frequently need to connect their wallets to unknown smart contracts, which can lead to wallet-draining and loss of funds.

In the first six months of 2024 alone, the thefts of crypto hacks and exploits surged to $1.38 billion, representing an increase of more than 50% in comparison to the same period in 2023.

These complexities and risks deter many potential investors and users from engaging with DeFi platforms and other crypto services.