Apr 2, 2025

But what exactly is smart money in crypto and where can one track their execution strategies? The Smart Money Concept (SMC) is based on the idea that there are some well-informed investors who tend to make more strategic decisions. This group of market participants often has access to more accurate or real-time data, advanced analytic tools and insights that offer a deeper understanding of market trends and future opportunities. In traditional finance, smart money mostly comprises established financial institutions such as banks, fund managers, hedge funds and high networth individuals. These are the players that markets are keen on when they announce quarterly earnings, outlook on specific stocks or allocate significant capital towards a specific industry as was the case during the dotcom era and more recently with the AI boom. Back to the digital asset market; although still a new area of investment, there are quite a number of stakeholders that seem to have performed exceptionally well over the years. These include crypto VCs, investment firms and retail investors that caught the 2017 ICO boom, 2020/2021 DeFi summer, among other major bull runs. So, how can one leverage the insights or data that these players have already analyzed to invest like smart money? Real-Time Analytics and Wallet Tracking One of the ways that newbie crypto investors can approach the smart money concept is by using some of the available analytics platforms to track the associated wallets. For example, Nansen, one of the leading on-chain analytic platforms has gone a step further to label smart wallets based on unique factors such as hitting a cumulative minimum of $1.5 million in profits, among other relevant metrics. It is also possible to track customized dashboards through queryable crypto analytics platforms such as Dune. Just recently, a dashboard was created to track Murad's wallet (a memecoin enthusiast and investor). With this type of insight, anyone whether a newbie or veteran can simply replicate Murad's buys and sells in the memecoin space, giving them access to already expert analyzed executions. Decentralized Asset Management Platforms Thanks to the decentralized and permissionless nature of crypto markets, new investors can leverage a platform like Mosaic Alpha to seamlessly invest alongside smart money. This DeFi application (DApp) removes the complexity of investing for beginners and experts who don't have the time to consistently keep tabs on the market by introducing what are known as token baskets. Instead of a newbie struggling to curate an optimal portfolio, Mosaic Alpha provides an ecosystem where smart money (asset managers and experienced crypto investors) can partner with the platform to create and list strategic token baskets made up of several crypto assets. The newbies can then invest in these token baskets, giving them the same exposure as smart money. To further democratize access to expert strategies, Mosaic Alpha has just launched its Basket Manager Combine—a three-month competition running from April to June—inviting crypto influencers, asset managers, and investors to showcase their investment strategies and attract others to participate in their exact strategy. Participants build their own token baskets using whitelisted assets, compete on the leaderboard, and earn performance-based fees from those who subscribe to their strategy. For new investors, this creates a transparent, gamified environment to follow and benefit from expert portfolio managers—making the smart money concept actionable and rewarding. More importantly, it's a win-win for both parties. The new investors get to follow smart money while the smart money can generate passive income as more newbies buy into their baskets through a one-time buy fee or performance fee. Monitoring DeFi Protocols Another alpha for new crypto market entrants would be to analyze inflows, outflows and other relevant metrics through DeFi monitoring protocols. For instance, a simple glance of DeFi Llama would show a surge in activity in more nascent areas of innovation such as restaking; the sector's total value locked (TVL) jumped from $1.3 billion at the beginning of 2024 to $16 billion as of writing. While it may not necessarily mean that smart money is investing in restaking, the trend is a good indicator of where capital is flowing into. DeFi protocols could also come in handy in the identification of outstanding protocols given that some of the platforms provide important metrics such as the number of active users, daily trading volumes, number of transactions and the native token market price over different periods. Social Media and Community Signals The crypto market tends to operate in the very ‘cult like' way. At one time, everyone was investing in DeFi, NFTs and now memecoins seem to be the flashy assets; the question is how the market manages to achieve this type of synchrony? It's all coordinated through social media platforms, mostly X, while more under the hood projects are first announced on Discord or Telegram channels. Curating one's social media feed to follow some of the top accounts in crypto and scouting for these ‘exclusive' communities is part of following the smart money. In fact, most of airdrops or initial community incentives have been announced through social media or community channels. Of course, there is the risk of getting too clouded with all the shilling but one thing is for sure; the core community is always among the first to be rewarded. Conclusion Whether one is new to crypto or holds some experience badges, there's always another player who will likely outperform you. The goal is not to engage in a zero sum game but rather find the cutting edge; in this case, following smart money increases one's probability of winning compared to going through the hassle of research or experimenting with one's hard earned money. The aforementioned strategies are just a few of the examples of how to approach the smart money concept. There are more options, including tracking the buying and selling patterns by institutional investors such as Blackrock or Microstrategy; it is more likely than not that these players have a better understanding or rather resources to analyze the crypto market. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. Source: https://cryptodaily.co.uk/2025/04/why-following-the-smart-money-could-be-a-gamechanger-for-newbie-crypto-investors