If you have spent any time in the cryptocurrency industry, you know how difficult it can be to keep up with the latest trends. There is always a new project — a coin, an NFT, a DAO, or a decentralized game — that is making news and creating buzz. For even the casual investor, all of the chatter can feel like whiplash.
💡 Read Social Listening Guide: Proven Hacks, Strategies, and Tools
That is why social listening for crypto can provide such an advantage. Social listening software helps traders, investors, and builders cut through the noise and get a clear picture of the market. By tracking social media conversations, you can get unique insights into what the community thinks about individual projects as well as the industry as a whole.
But developing a social listening strategy that produces valuable intel can be a challenge. So this article covers the 5 steps you can take to keep your finger on the pulse of the cryptocurrency industry and start social listening for crypto the right way.
What is Social Listening
Social listening is the process of monitoring social media networks and other online spaces for mentions of a brand, keyword, topic, or industry. Through the application of artificial intelligence and natural language processing, this practice enables businesses to better understand customer sentiment, social media trends, and real-time engagement metrics.
And because social listening is typically applied to social media channels, organizations can pair these public conversations with demographic and psychographic characteristics. This combination of data sources now provides a practical solution to answering questions such as:
- What do people think about this topic?
- What is being said about this company?
- Who is most likely to be interested in this product or service?
- When did this trend first start?
- Where did this trend originate?
- Where is this conversation most prevalent?
Armed with social listening software, businesses can uncover social media trends, derive insights from customer conversations, and make data-driven decisions around their social media marketing strategy.
Read Complete Guide to Social Listening: Proven Hacks, Strategies, and Tools
Social Listening for Crypto
Although social listening was originally developed for business intel and social media marketing, the technology was quickly adapted for social news and social analysis in the crypto industry. Both retail and institutional investors now recognize the power of social listening for crypto — from identifying the next hot token to analyzing NFT communities or getting ahead of market-moving news.
The most popular platforms for social listening in the crypto industry are Twitter and Reddit. These social media channels are used by crypto influencers and industry leaders to share information, network with other crypto professionals, and engage in discussions about the latest projects. Both apps also have highly engaged audiences and offer real-time feedback on trending topics.
The value of social listening for crypto is that it provides access to an abundance of unbiased sentiment data. This data can then be analyzed to inform investment decisions, monitor sentiment on a given project or token, and track the relative social performance of different opportunities.
How to Create a Crypto Social Listening Strategy
If you are sold on the benefits of social listening for crypto, the next step is to implement a social listening strategy. This plan should outline where you gather data, what metrics you will track, and how it will inform your decision-making.
Here are the 5 most important steps to create an effective crypto social listening strategy:
1) Goal Setting
Depending on your objectives, you may want to track social sentiment on specific tokens and projects, monitor social media trends in the crypto space, or measure brand engagement across social networks.
So before crafting your social listening strategy, reflect on your ideal outcome. Do you want to catch the next bull run before it happens? Do you hope to identify a business idea based on customer feedback? Or would you like to compare the engagement rates of two similar projects?
Next, identify the data and metrics you need to achieve your goal. Getting as specific as possible at this stage will help you narrow down the social media channels you focus on and the social listening tools you consider.
2) Platform Selection
Now that you have a clear idea of what data you need to collect, the next step is selecting the right platform. At present, there are 4 primary social listening apps you can try.
Determ
Determ is a full-suite social listening platform for monitoring online brand mentions and performing market research. The app tracks mentions from more than 100 million online sources including Twitter profiles, Facebook, YouTube, blogs, websites, and more.
Users can leverage this data to analyze sentiment, compare competing crypto projects, and stay up to date on the latest developments in the crypto space. With real-time data analytics, the platform even highlights the virality, engagement, and reach of emerging crypto trends. Plus, the customizable report templates can pull from more than 2,000 data points for more advanced crypto analysis.
Augmento
Augmento provides social sentiment analysis for Bitcoin and other major crypto assets. The tool scrapes Bitcointalk, Twitter, and Reddit every hour for social data. This information is then categorized according to 93 sentiments and topics characteristic of crypto discourse.
Augmento’s data points can be used for both backtesting and creating sentiment indices. The platform’s Bitcoin Bull & Bear Index, for example, can in turn be leveraged to identify entry and exit points and gain alpha in the markets.
LunarCrush
LunarCrush is a powerful tool capable of social listening for crypto, NFTs, and stocks. The platform aggregates data from more than 2 million posts per day and turns it into “actionable intelligence.”
For each of the 4,000+ tracked crypto assets, LunarCrush produces a Galaxy Score and an AltRank. The former is an attempt to explain recent price movements, and the latter analyzes social performance and price performance relative to Bitcoin. Each coin also has graphs to track social mentions, engagement, and sentiment metrics over time.
Santiment
Santiment is a social analytics platform that monitors more than 2,000 crypto assets. The app features both a trading API and a social listening dashboard with graphical representations of social trends.
Santiment listens to Telegram, Reddit, and Twitter and surfaces trending phrases every hour. Users can also search individual terms, compare the social volume of various assets, and identify “connected words” which are often used in conjunction. The proprietary social listening AI is available for free with a 30-day lag, or for $49 per month for access to all current and historical data.
3) Data Analysis
Your social listening strategy is only as good as the data it captures. To make sure your social listening efforts bear fruit, you must analyze, interpret, and test the social data you collect.
Start by narrowing down the crypto universe to only those coins you are interested in tracking. If you are trying to time a market top or bottom, this may mean monitoring blue-chip assets like Bitcoin and Ethereum. Or, if you want to identify the next project to “moon”, you may focus your attention on small-cap altcoins.
From here, determine which social metrics are most relevant for your analysis. This could include social mentions, sentiment scores, engagement rates, or average post length. A market bottom, for example, may be characterized by extreme pessimism, low social engagement, and longer social media posts. Whereas a buzzy new project may be identifiable based on social mentions alone.
Once you have collected the data that is necessary for your project or portfolio, use this information to backtest performance and build predictive models. This will help you understand how social listening affects price action and formulate an edge as a crypto investor or trader.
4) Insight Extraction
Before executing any new trades, use the social data you have collected to create custom indicators. For more advanced traders, this may mean writing scripts or building custom models with the data. However, even non-technical investors can combine a handful of metrics in a spreadsheet.
The objective of this step is to produce signals — times to enter or exit a position — that are backed by social data. For example, you may calculate a “sentiment-to-price correlation” score to identify coins with social trends that are out of sync with the price. This indicator could produce a buy signal when the correlation dips, and price drops but sentiment remains high.
After creating a model that you are satisfied with, always backtest it against previous social data points to ensure your metric is producing accurate insights. In other words, how did the price perform on average the last 10 times your indicator produced a buy signal? And what about the last 10 sell signals?
You may find that social data should be used as an additional input to a trading strategy, rather than the sole source of information. But that doesn’t mean your signals are not valuable. Think of insight extraction as an ongoing process as social trends, lingo, and behavior change quickly in the volatile crypto space.
5) Action
The final step in creating a social listening strategy is putting it into action! This could mean buying or selling a crypto asset, identifying a new opportunity, or simply gathering social insight to stay up to date on the latest trends.
After all, you didn’t go to the trouble of social listening just to sit on your hands! As you respond to signals generated by social data, keep track of your actions and your performance — just as you would with any other metric.
To Conclude
Tracking social data alongside price information will give you a more comprehensive view of the market and help you make better trading decisions. But remember, social listening is not a substitute for technical analysis or fundamental research. Instead, social data are here to supplement your current trading strategy and add another layer of context.
Daniel Anderson is a marketing expert who writes about entrepreneurship, business, and personal finance. Learn how to launch an ecommerce business, scale through digital marketing, and plan for financial freedom with step-by-step guides at TheMoneyManiac.com.
