Learn how to turbocharge your crypto research with ChatGPT. Discover how to review crypto protocols, analyze tokenomics, assess valuations and more with AI tools.
While the free version of ChatGPT is powered by GPT-3.5, the premium version (ChatGPT Plus) is powered by GPT-4. This is a far more powerful model with additional features, several of which are particularly useful for crypto research.
For example, GPT-4 can:
1. Browse the internet
2. Support up to 25,000 word inputs
3. Multi-modal capabilities
4. Priority access
For light research, the free version of ChatGPT will likely suffice for most users. But for those looking to perform in-depth research with the latest data, ChatGPT Plus is a worthwhile splurge.
Remember, ChatGPT isn’t always accurate, and should not be used for direct financial advice. Let's take a look some of the things ChatGPT could do as a crypto research analyst.
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Summarize New Projects
Arguably ChatGPT’s most powerful feature is its ability to summarize information and extrapolate the key insights from the text and data it is provided.
This can help you take potentially in-depth and complex pieces of text, such as whitepapers, blog posts, and wiki entries, and simplify the most important information.
Furthermore, you can tell ChatGPT to take on the role of a professional financial analyst specializing in cryptocurrencies. Or present itself as a degen trader that specializes in meme coins and short-term investments.
Perform Fundamental Analysis
Many cryptocurrency traders and investors are interested in the fundamental strength of a project, looking at the intrinsic factors that can affect its value and long-term viability — such as its disruptive potential, product/market fit, unique selling points and competitive advantages.
This can be a time consuming process, typically requiring you to aggregate information from multiple sources, cross-reference data, and make judgments about multiple key points. Fortunately, ChatGPT can be used to drastically simplify this process, helping you arrive at your conclusions much faster.
By prompting ChatGPT to play the role of a seasoned fundamental analyst, you can tease out insights that you might otherwise gloss over.
Evaluate Tokenomics and Governance Model
A project’s tokenomics is crucial for investors to understand the supply and demand of the token. By analyzing a project's token supply, emission schedule, utility, demand, distribution and governance, ChatGPT can provide valuable insights into a project's potential value and prospects over the long-term.
ChatGPT can also help evaluate a project's governance model. By asking specific questions and providing relevant data, ChatGPT can offer a deeper understanding of a project's treasury management, decision-making processes and more.
Now, let's get into the steps on how to use ChatGPT for crypto research.
Step 0: Getting Started with ChatGPT
You have to set the stage for ChatGPT to achieve the maximum results. Example:
You can also copy and paste relevant whitepapers, documents or project information into the ChatGPT window. GPT4 and other AI assistants with browsing capabilities can also read links.
By doing this, ChatGPT can browse the provided resources to gather information and generate meaningful analysis.
Remember, better data input will result in more relevant, reliable and advanced insights.
Step 1: Review Crypto Protocols with ChatGPT
Gaining a solid grasp of a project's fundamentals and the underlying protocols is crucial to conducting effective crypto research. To maximize the benefits of ChatGPT, ask specific questions to obtain the essential information tailored to your research goals.
Problem and Solution
Start by understanding the main problem a project aims to solve and how the solution it proposes. Targeted prompts allow ChatGPT to provide a clear and concise analysis of the project's core objectives. Example prompt:
"What's the problem that crypto project X aims to solve, and how does it propose to address this issue?"
Technology and Protocols
ChatGPT can also help you comprehend intricate technical concepts by providing explanations in simple terms. You can also ask for examples to further clarify the mechanics of a project. Example prompt:
"Explain how blockchain X’s consensus mechanism works, and provide an example of how it helps maintain the network's security."
Team Background and Experience
The expertise and previous experiences of project founders and core members can provide insight into the project's potential for success. Prepare prompts to gather information about the team members and their relevant experience in the field. Example prompt:
"Provide an overview of the team behind crypto project X, highlighting their skills and accomplishments in the cryptocurrency space."
Step 2: Analyze Tokenomics with ChatGPT
ChatGPT can effectively analyze a project's tokenomics and provide you with the necessary insights.
Token Supply and Emission Schedule
To form an educated opinion on a project's potential market value, it's essential to understand the token's total supply, circulating supply and emission schedule. Example prompt:
"What's the total supply, circulating supply, and the emission schedule for X token?"
Token Utility and Demand
Tokens can have various use cases, such as governance, staking or providing access to platform services. ChatGPT can help you conveniently delve into the different utilities associated with a project's tokens. Example prompt:
"How does the X token function within its ecosystem? What are its main use cases and factors driving its demand?"
Token Distribution and Governance
A fair and transparent token distribution may prevent centralization and other potential issues. Example prompt:
"How are the tokens for project X distributed, and do they play a role in the governance of the project?"
Step 3: Assess Community Engagement and Development Activity with ChatGPT
Market sentiment and community engagement are crucial factors since the hype around a project is at least as important as its fundamentals, if not more so. ChatGPT can help you analyze a project’s media presence (if it has browsing capabilities).
Social Media Presence
Strong social media activity is key to an engaged audience and future growth potential. You can ask ChatGPT to research the project's social media profiles and evaluate its presence across various platforms. Example prompt:
"Provide a summary of the social media presence for project X, detailing its size and engagement on platforms like Twitter, Reddit, and Telegram."
Development Activity
Continuous development is a positive sign for the project's commitment to delivering its goals. To evaluate a project's development activity, you can ask ChatGPT to analyze its GitHub repository or other sources that showcase the team's progress. Example prompt:
"Summarize the development activity for project X, including the frequency of commits and the overall size of its codebase on GitHub."
Media Coverage and Partnerships
Media coverage and strategic partnerships with investors can significantly impact a project's market sentiment and credibility. Well-established partnerships can boost the adoption and integration of a project's technology. Example prompt:
"List any notable partnerships, collaborations and media coverage involving crypto project X."
Step 4: Analyze Governance Model with ChatGPT
Protocol governance influences the long-term success and sustainability of cryptocurrency projects. ChatGPT can help you analyze a project's governance system and understand the power of whales and how centralized a project is.
Example prompt:
"Explain the role of on-chain and off-chain governance in project X and how they influence its decision-making processes and token holder participation."
Step 5: Value a Crypto Protocol with ChatGPT
Financial metrics, such as total value locked (TVL), circulating market cap, fully diluted market cap and generated fees/revenue can provide insights into a project's performance and investment potential. ChatGPT can analyze these metrics, offering a deeper understanding of the project's financial standing. You can provide ChatGPT with the data from analytics tools to value a protocol. Example prompt:
"Based on the numbers provided for token X, analyze whether it is a good investment."
Conclusion
ChatGPT and other AI assistants like Bard and Bing can help you save a lot of time doing your crypto research. You can also learn how to Trade Crypto Using AI.
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