Users can identify trading opportunities by tracking categories on CoinGecko, where coins are categorized thematically based on the storyline or trading narrative they are based on. 

Key Takeaways

  • Crypto categories became increasingly important with the rise of memecoins and its thematic appeal, necessitating the need for qualitative categorization.

  • Users can validate and find new trading narratives through the usage of categories.

  • Categories can also be used to flag out trading anomalies and identify outperformers.

In a messy world with thousands of coins launched daily, it can be hard for users to differentiate the unique selling points of each coin. This is especially hard given the lack of apparent utility of most of the newly launched coins. One way in which users are able to identify trading opportunities is through the unique way of categorizing coins thematically based on whichever storyline or trading narrative they are based on.

The Evolution of Crypto Categories

Traditionally, crypto categories are  based on their utility and functionality. This proved to be a simple but effective technique for understanding the relationship between different crypto tokens. Crypto categories such as Layer 1s, Decentralized Finance (DeFi) and Non-fungible Tokens (NFTs) are self-explanatory ways to categorize many crypto tokens and continue to provide a useful overview of the crypto ecosystem.

However, quantifiable categories begin to break down in usefulness when users further categorize and group crypto tokens colloquially based on market happenings. Categories such as Sam Bankman Fried (SBF) tokens, Murad’s List, Made in USA, Venture Capitalist Coin (VC coins) became important considerations of many users due to market movements, but these nuances are not captured by traditional categorization. 

Categorizing tokens based on current market happenings require a qualitative and hands-on approach which can be hard to achieve. Wanting to understand the right way to do this, the CoinGecko team surveyed frequent users of our platform and we are proud to share with you our findings and our discovery in how the best users use categories to find hidden crypto gems #BinanceAlphaAlert t $SOL