Angel investor and influencer marketing pioneer Gil Eyal revealed a tip in September about an Israeli founder “who is revolutionizing the way traders invest in crypto.”
Eyal, the managing partner of Starfund, has been investing in crypto coins since 2013, so his “news” drew some attention.
Cryptocurrency is digital tokens for goods-and-services transactions registered online using blockchain technology. Here’s what startup Crowdsense does:
This AI platform delivers real-time intelligence reports to crypto traders and investors. Crowdsense scans more than a billion social-media sources to sniff out news, hype and sentiment relating to more than 3,000 cryptocurrencies.
“As an active investor in the crypto space, I always felt like there was something missing in my arsenal,” Eyal said. “In an industry driven by retail investor sentiment, I found it amazing that tools focus on either technical analysis or on chain metrics, which completely ignore social-media hype and sentiment or the occurrence of direction-changing events.”
Crowdsense enabled Eyal to detect market-shifting events before the price started or completed its spike. It also afforded him a granular view of how each token is perceived by the market.
“The crypto market has significantly outperformed every other asset in the world over the last decade,” he said.
“To a much larger extent than most markets, it is driven by investor sentiment. If enough people believe a crypto token is valuable, it becomes valuable. Investors who are able to identify shifts in sentiment, or detect market-moving events early, make exceptional returns.”
Just one tweet from Elon Musk last March, announcing that people could buy a Tesla with Bitcoin, and another tweet two months later saying it wouldn’t be possible after all, profoundly affected the entire market, Eyal said.
Move over, Musk
Crowdsense founder Eliaz Tobias said that back in May, when everyone was focused on Musk’s flip-flop tweets, Crowdsense detected from an influencer post that U.S. billionaire investor Mark Cuban suggested buying Polygon cryptocurrency. Polygon went up 118 percent in price after Crowdsense shared that nugget of intelligence.
“Not everything leads to such a huge spike in price, but we see more and more correlation between the events we detect and changes in the market,” said Tobias.
“For example, on Aug. 24 there was an event that appeared in our system that told users there was a spike in social-media sentiment of five points, on a scale of zero to 10, related to the Chain Guardian coin. The price went up as a result of that from $0.85 to $1.46. That’s more than 70 percent growth.”
Tracking about a billion sources every day, including small influencers, brings fast, comprehensive coverage of the most significant events in the crypto world.
A proprietary algorithm filters out inconsequential “noise” from the data stream, a capability that Tobias says differentiates Crowdsense from competitors.
“Some of our users go to our system when they hear something about a coin to see if influencers are talking about it, or if some news came out around it, to validate and support their investment decision,” said Tobias. “You can get signals from us and validate signals through us.”
The pivot
Crowdsense is still in beta phase, not yet charging for subscriptions. That will begin in a few months, Tobias said.
Within the first month, the platform had about 650 subscribers from across the globe.
“We see hundreds using it actively every day. That’s without any marketing. Now we are driving partnerships so more crypto traders and investors will know about us,” Tobias says.
Crowdsense graduated from the Techstars and Barclays accelerator and has raised about $1.5 million from Wix founder Avishai Avrahami and angel investors in Israel, Europe and the U.K. The company is headquartered in Tel Aviv and has seven full-time employees.
Tobias spent nine years at Microsoft, five of them as CTO of Microsoft Israel and four heading Microsoft’s cloud enterprise business in Seattle. He founded Crowdsense with Eran Ruso about three years ago.
At first, their focus was detecting hazards, accidents or security events from social media to provide insights for corporates.
“After discussions with investors, we pivoted to detecting early events in the financial space,” he said. “And next big change was because of COVID-19, which led to a boom in small retail traders trading from home, and crypto coming into the mainstream.”
Crowdsense switched from tracking Forex and commodities to tracking crypto last March.
“The platform is so flexible we were able to transition in six weeks,” he said.
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Produced in association with Israel21C.
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