In this article, I will reveal 3 takeaways from the Electric Capital Crypto Developer Report 2021. Reading their data-driven report was fascinating and I thought I would write a short summary.
1. Crypto market cap and number of developers: a strong correlation
Let’s go straight to the point, boom:
There is an obvious very strong correlation between market capitalization of the crypto space and the number of monthly active developers. This conclusion is a very important tool to invest, like other metrics I’m sharing here. The question “Is it a good time to invest in crypto?” can be looked at differently.
Correlation is not always causation BUT… In that case I think it is. And I usually apply the following:
-If the number of developers is going down and the capitalization is going up: time to sell.
–If the number of developers is going up and the capitalization is going down: time to buy.
More data to feed your thinking:
2. Active developers: ETH ruling the game
Second bomb, Ethereum is dominating the game in term of number of developers with 4k+ developers:
Look at the numbers… Impressive.
3. An indicator to pick crypto gems: the developers growth rate
Another indicator the report looks at is the developers growth rate. It’s a massive indicator to spot undervalued crypto project.
This slide is pretty interesting with a huge investment case for the tokens listed below:
You also find them on this graph:
I can’t help noting the amazing performance of Binance Smart Chain (BSC), Near (NEAR), Polygon (MATIC), Avalanche(AVAX), Tezos (XTZ) and Cardano (ADA).
4. Developers retention: BTC, ETH, ADA, XLM, LUNA, SOL, FTM win
The developers retention rate is THE important metric to look at for the bear market to come.
Guy from Coinbureau covers that in this video here. BTC and ETH are first and second. Then comes:
5. Conclusion
This Electric Capital Developer Report is gold for investors. Based on it, I’ve tried to look at coins with good developers adoption, good developers growth rate and good developers retention rate. As a result, I’ve put the following tokens on my list of coins to analyze in the next articles: BSC, NEAR, MATIC, AVAX, XTZ, XML, XLM, LUNA, SOL, FTM.
Until then… Take care.
Clem
Disclaimer: this is not financial advice
