Crypto Basics

What is a Multisig Wallet and How it Works?

Learn everything about multisig wallets with our comprehensive guide and discover how this secure method of crypto storage functions.
S. Vishwa
11 Minutes
MIN

In the world of cryptocurrencies, security is paramount. With digital assets' increasing value and prevalence, investors and organizations are constantly seeking ways to protect their holdings from potential threats. 

One such security tool that has gained significant attention is the multisig wallet. This comprehensive guide will explore what a multisig wallet is, how it works, the different types available, the advantages and disadvantages, and the safety measures associated with these wallets.

What is a Multisig Wallet?

A multisig wallet, also known as a multi-signature wallet, is a type of cryptocurrency wallet that requires multiple signatures to execute a transaction. 

Unlike traditional wallets that rely on a single private key, multisig wallets distribute the signing authority among multiple parties. This means a defined threshold of signatures is needed to validate and authorize any transaction.

The workflow of a multisig wallet remains the same regardless of the number of signers. Any party involved in the wallet can initiate a transaction by signing it with their private key. However, the transaction remains pending until it receives the required additional signatures.

Multisig wallets can be configured in different ways. One standard setup is the N-of-N configuration, where all signatories must validate a transaction. 

For example, a 2-of-2 multisig wallet requires both parties to sign a transaction to be considered valid. Another configuration is the N-of-M setup, where a specific subset of signers must approve a transaction. 

In a 3-of-4 multisig wallet, three out of the four signers must validate the transaction for it to be executed.

To ensure maximum security, it is crucial to distribute the multisig private key access among distinct entities. Storing multiple private keys in a single location undermines the purpose of a multisig wallet, as it creates a single point of failure. 

The ideal scenario is to grant access to entities so that a single security breach does not result in the loss of multiple keys.

How Does a Multisig Wallet Work?

The concept of a multisig wallet revolves around using multiple private keys to authorize transactions. Users sign a transaction with their private key when they initiate it. The transaction is then broadcasted to the network as pending, awaiting additional signatures.

Once the required number of signatures is obtained, the transaction is considered valid and can be executed on the blockchain. This process ensures that no single party has complete control over the wallet and eliminates the risk of a single point of failure.

Let's consider an example to understand better how a multisig wallet works. Imagine a 2-of-3 multisig wallet with three signers: Alice, Bob, and Carol. When Alice wants to send funds from the wallet, she signs the transaction with her private key. The transaction is then marked as pending. 

To complete the transaction, Bob and Carol must also sign it with their respective private keys. Once all three signatures are obtained, the transaction is valid and can be executed on the blockchain.

Multisig wallets can be implemented on various blockchains, and many cryptocurrency exchanges and custodians offer multisig wallet services to enhance the security of their client's assets.

Types of Multisig Wallets

Multisig wallets come in different configurations to cater to various needs and use cases. Here are some common types of multisig wallets:

1-of-2 Signatures

A 1-of-2 multisig wallet is one of the simplest forms of multisig storage. In this setup, two private keys are bound to a single wallet, and either key can approve transactions. 

This configuration is often used in small businesses where two founders want equal control over the funds. It can also be a personal backup solution, as users can recover funds even if one private key is lost.

2-of-3 Signatures

A 2-of-3 multisig wallet requires two out of three registered signers to complete a transaction. This configuration is commonly used for escrow transactions, where a trusted third party holds one of the keys. 

Cryptocurrency custodians also implement this type of wallet as an additional security measure. They may hold two keys, one stored securely offline and the other held online for more effortless signing. 

The third key is delegated to a trusted blockchain security company, which acts as a safeguard in case one of the custodian's keys is lost.

3-of-5 Signatures

A 3-of-5 multisig wallet is a more robust configuration that requires three out of five signatures to validate transactions. This setup is functional in corporate structures where several decision-makers must approve fund transfers. 

The transaction can be approved if over 50% of the parties agree. Distributing the signatures among entities in diverse geographical locations enhances security.

Hosted vs. Unhosted

Multisig wallets can be categorized as hosted or unhosted. A hosted multisig wallet is created on a third-party platform like Coinbase Custody or BitGo. 

These platforms provide institutional-grade security solutions and offer clients access to multisig functionality. Clients can register approved signatories and define signature thresholds for fund transfers. 

On the other hand, an unhosted multisig wallet, also known as a self-hosted wallet, is where the individual or organization holds the private keys without relying on a trusted third party. 

Unhosted wallets generally require more complex setup processes and infrastructure optimization for security. However, they offer greater convenience and eliminate the counterparty risk associated with third-party custodians.

Advantages of Multisig Wallets

Multisig wallets offer several advantages, making them attractive for users seeking enhanced security and control over their digital assets. Let's explore some of the key advantages:

1. Increased Security

One of the primary benefits of using a multisig wallet is its heightened security. By requiring multiple signatures to authorize transactions, multisig wallets reduce the risk of a single point of failure. 

Each signer holds a unique private key, making it difficult for hackers to gain unauthorized access to the wallet. Even if one private key is compromised, the funds remain secure as the hacker still needs access to the other keys to complete any transaction.

Multisig wallets also offer a backup option. If one or more private keys are lost, as long as the setup does not require all signatures to validate transactions, users can quickly recover their wallets. Additional signatures can be added to distribute ownership further and improve security.

2. Escrow Transactions

Multisig wallets are ideal for escrowed transactions, where a neutral third party holds funds until predefined conditions are met. With a multisig wallet, parties can ensure all obligations are fulfilled before releasing the funds. 

For example, a buyer could deposit funds into a multisig wallet, and the seller would only receive the funds once the purchased goods are received and deemed satisfactory. The presence of a trusted third-party signatory adds an extra layer of security and prevents either party from breaching the contract terms.

3. Two-Factor Authentication (2FA)

Multi-signature wallets provide a form of two-factor authentication (2FA) for cryptocurrency transactions. To validate any pending transaction, eligible signers must provide their signatures. 

This feature adds an extra layer of security, ensuring that only authorized parties can authorize fund transfers. In the event of unauthorized access to a private key, users can easily revoke access and prevent any malicious actor from completing transactions.

4. Cooperation Between Multiple Parties

Multisig wallets are particularly useful in organizational setups where multiple parties must collaborate and make joint decisions. 

In decentralized autonomous organizations (DAOs) and corporate structures, multisig wallets can ensure that no single party has unchecked control over the funds. 

All parties involved must provide their signatures to authorize a transaction, promoting accountability and preventing any single entity from making unauthorized transfers. Additionally, the signing of a transaction can also serve as a form of voting, representing approval of a business decision.

Disadvantages of Multisig Wallets

While multisig wallets offer increased security and control over digital assets, they also have drawbacks. It's essential to consider these disadvantages before deciding to use a multisig wallet:

1. Transaction Speed

One of the trade-offs of using a multisig wallet is the potential decrease in transaction speed. Compared to regular wallets, multisig wallets can introduce delays, requiring multiple signers to validate a transaction. 

The time it takes to complete a transaction can vary depending on the number of signatories and geographical boundaries. This limitation can make multisig wallets less convenient for emergencies or time-sensitive payments.

2. Technical Knowledge

Using a multisig wallet requires specific technical knowledge and familiarity with security practices. The setup process may involve consulting a third-party wallet provider, installing specific software, or purchasing dedicated equipment such as multiple hardware wallets and safe deposit boxes. 

These requirements can be relatively complex for the average crypto investor and may hinder the widespread adoption of multisig wallets.

3. Fund Recovery and Custodian Risk

Compared to single-key storage, recovering funds stored in a multisig wallet can be more time-consuming and require additional coordination. In the event of a lost private key or unavailable signatory, the recovery process can be complex and may involve additional security measures. 

Opting for a multisig wallet hosted by a third-party custodian also introduces counterparty risk. If the custodian experiences a security breach or fails to safeguard the private keys, it could have severe consequences for the wallet holders.

Are Multisig Wallets Safe?

While multisig wallets offer enhanced security features, it's important to note that they are not foolproof. No security measure can guarantee absolute protection against all possible threats. 

However, when used correctly and combined with other security best practices, multisig wallets can significantly reduce the risk of unauthorized access and improve the overall security of digital assets.

To ensure the safety of your multisig wallet, it's crucial to follow these best practices:

  • Choose a reputable wallet provider or implement robust self-hosted security measures.
  • Carefully select the signatories and distribute the private keys among different entities in diverse locations.
  • Regularly update and maintain the security infrastructure of the wallet.
  • Keep backup copies of all private keys in secure and separate locations.
  • Regularly monitor account activity and be vigilant for any signs of unauthorized access.
  • Stay informed about the latest security vulnerabilities and follow industry best practices.

By following these guidelines, users can maximize the security of their multisig wallets and reduce the risk of potential breaches.

Frequently Asked Questions

Q1. What is the difference between a multisig wallet and a regular wallet?

A regular wallet relies on a single private key to authorize transactions, while a multisig wallet requires multiple signatures from different parties to validate transactions. This added layer of security makes it more difficult for unauthorized individuals to gain control over the funds.

Q2. Can I use a multisig wallet for personal use?

Yes, multisig wallets can be used for personal use. They provide an extra layer of security for individuals who want to protect their digital assets from potential threats. However, the setup process and technical requirements may be more complex than regular wallets.

Q3. Can multisig wallets be hacked?

While no security measure is entirely immune to hacking, multisig wallets are significantly more secure than regular wallets. The distribution of private keys among multiple parties makes it more difficult for hackers to gain unauthorized access. However, it's essential to follow best practices and stay updated on the latest security vulnerabilities to minimize the risk of hacking.

Q4. Are multisig wallets suitable for small businesses?

Yes, multisig wallets can be beneficial for small businesses. They provide additional security and control over funds, especially when multiple founders or partners need equal control. However, it's essential to consider the technical requirements and potential trade-offs, such as transaction speed, before adopting a multisig wallet.

Q5. Can I recover my funds if I lose one of the private keys?

The ability to recover funds in the event of a lost private key depends on the specific setup of the multisig wallet. If the wallet does not require all signatures to validate transactions, it may be possible to recover the funds using the remaining keys. However, it's essential to have backup copies of all private keys stored in secure locations to prevent losing access to the wallet.

Conclusion

Multisig wallets provide an advanced security solution for individuals and organizations looking to protect their digital assets. By requiring multiple signatures to authorize transactions, multisig wallets reduce the risk of unauthorized access and provide an additional layer of control. 

They are particularly useful in escrow transactions, corporate structures, and scenarios where multiple parties must collaborate and make joint decisions.

While multisig wallets offer increased security, it's essential to consider the potential trade-offs, such as transaction speed and technical complexity. 

By following best practices and staying informed about the latest security vulnerabilities, users can maximize the safety of their multisig wallets and minimize the risk of potential breaches.

In conclusion, a multisig wallet is a powerful tool that can significantly enhance the security and control of digital assets. 

By understanding the workings of multisig wallets and implementing them correctly, users can enjoy peace of mind knowing that their cryptocurrencies are protected from potential threats.

Disclaimer

The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other advice, and you should not treat any of the website's content as such.

Token Metrics does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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Research

AI Crypto Trading: Token Metrics Real-Time AI Grades for Crypto Trading

Token Metrics Team
8 min
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The cryptocurrency trading landscape moves at lightning speed. Tokens pump, narratives shift, and entire sectors rotate overnight. In this chaotic environment, traders need more than just basic charts and lagging indicators — they need real-time, data-driven tools that can process vast amounts of information instantly.

That’s exactly where AI crypto trading comes in. In 2025, Token Metrics has taken cryptocurrency trading to a new level with its advanced Real-Time AI Grades, giving both traders and investors a clear edge in the hyper-volatile crypto trading markets.

With AI-powered Trader and Investor Grades, Token Metrics helps users evaluate any token’s strength, momentum, and long-term trend alignment — all calculated in real-time using over 80 data points. This isn’t just data. It’s actionable intelligence, powered by AI cryptocurrency trading models designed for today’s fast-moving market.

What Are Token Metrics Real-Time AI Grades?

At the core of Token Metrics' AI crypto trading platform are two proprietary grading systems:

1. Trader Grade

  • Focuses on short-term price action and momentum.
  • Designed for swing traders, active traders, and short-term speculators.
  • Measures rapid changes in volatility, volume, trend strength, and technical setups.
  • Helps traders identify tokens with breakout potential before they take off.

2. Investor Grade

  • Focuses on long-term trend sustainability.
  • Ideal for long-term holders, portfolio managers, and fundamental investors.
  • Evaluates trend alignment, strength of price structure, and on-chain sustainability.
  • Helps investors avoid weak tokens and stay positioned in strong long-term performers.

Both grades are calculated using over 80 quantitative and on-chain data points that are continuously updated. These data points include:

  • Volatility metrics
  • Liquidity and volume trends
  • RSI divergences
  • On-chain transaction activity
  • Relative strength vs Bitcoin and Ethereum
  • Order book dynamics
  • Sentiment analysis
  • Whale wallet flows
  • Exchange inflows/outflows

The grades are expressed on a simple 0 to 100 scale, making it easy for traders to quickly assess a token’s strength. In most cases, a Trader Grade above 90 signals that a token is showing breakout potential, while a falling Investor Grade can warn of an impending trend reversal.

In short, Token Metrics uses AI cryptocurrency trading technology to distill massive data into simple, actionable grades — making cryptocurrency trading far more data-driven and precise.

Real-Time AI Grading: The New Standard for Crypto Trading

Until recently, these grades were updated daily. But now, Token Metrics has moved to real-time grading for high-volume tokens, creating a breakthrough moment for AI crypto trading.

What real-time AI grading means for crypto traders:

  • Intraday Adjustments: Grades now update throughout the day based on real-time price movements, volume surges, and market volatility shifts.
  • Early Breakout Detection: Traders receive breakout signals early — often before major price moves hit social media or mainstream attention.
  • Risk-Off Alerts: Investor Grades drop as long-term trends weaken, providing timely warnings to exit positions before steep corrections occur.

With real-time grading, these AI crypto trading signals are no longer simply informative — they’re fully actionable. Traders can now respond to shifts in momentum as they happen, not after the move has already played out.

Live Use Case: Real-Time Grades in Action

During a recent Token Metrics webinar, the power of real-time AI grading was demonstrated with live market examples:

  • The Trader Grade flagged a high score on $NORMIE just before a 40% intraday move. Traders who acted on the signal caught the breakout early.
  • Simultaneously, the Investor Grade on $TNSR began to drop, signaling weakening long-term strength — a clear sign to rotate out and avoid potential downside.

This real-time grading system gives traders an enormous edge in cryptocurrency trading. Instead of reacting emotionally to price moves, traders can confidently follow objective AI-powered signals.

Visual Overlays: Making AI Crypto Trading Clearer Than Ever

One of the most powerful features of Token Metrics Real-Time Grades is the overlay integration on live price charts within the platform.

With visual overlays, traders can:

  • Instantly see when grades peak or drop.
  • Correlate grading signals with live price action.
  • Visually backtest how grades behaved during previous trends.
  • Clearly identify when a token’s momentum flips from bullish to bearish.

This creates a visual roadmap for crypto trading — allowing users to instantly read the health of any token’s trend with unparalleled clarity. For AI crypto trading, this level of real-time visual feedback dramatically improves confidence and precision.

Token Metrics AI Grades vs Traditional Crypto Trading Indicators

Traditional cryptocurrency trading indicators like RSI, MACD, and basic chart patterns have major limitations:

Feature                                                                           Token Metrics AI Grades             Traditional TA Tools

Combines 80+ real-time data points                        ✅ Yes                                          ❌ No

AI-powered signal generation                                    ✅ Yes                                          ❌ No

Real-time intraday updates                                        ✅ Yes                                          ❌Often delayed

Visual chart overlays                                                   ✅ Yes                                         ❌ Manual

Integrated filtering & automation                                ✅ Yes                                          ❌ Lacks automation

While traditional indicators rely on simplistic price-based formulas, Token Metrics combines multi-dimensional data sources with AI modeling. This is the future of AI cryptocurrency trading — far more comprehensive, adaptive, and responsive than old-school technical analysis.

Who Should Use Token Metrics AI Grades?

The beauty of real-time AI grading is that it’s highly adaptable across different types of cryptocurrency traders and investors:

  • Day Traders & Swing Traders: Spot breakout candidates early based on rapid Trader Grade spikes.
  • Algorithmic Strategy Builders: Feed real-time grading data into automated AI crypto trading bots for highly responsive execution.
  • Fund Managers & Portfolio Analysts: Vet tokens for long-term allocations using Investor Grades and trend alignment.
  • Crypto Research Analysts: Monitor sector strength, narrative shifts, and capital rotations based on aggregate grades.
  • Token Metrics API Developers: Integrate AI grading data directly into custom crypto trading dashboards and bots.

If you care about momentum, timing, filtering, and precision in cryptocurrency trading, these grades offer one of the strongest data-driven edges available in the market today.

Why AI Crypto Trading Is the Future of Cryptocurrency Trading

The cryptocurrency market is simply too fast, too global, and too emotional for purely manual trading. Attention shifts hourly. Liquidity floods into narratives instantly. Retail and institutional money rotate rapidly between sectors.

AI crypto trading is the only way to stay ahead of this chaos.

With Token Metrics’ Real-Time AI Grades:

  • Traders don’t need to monitor hundreds of charts 24/7.
  • Emotions and guesswork are replaced with objective AI signals.
  • Capital can be rotated systematically into outperforming sectors.
  • Positions can be exited efficiently as momentum fades.

This is quant-grade crypto trading — delivered directly to everyday traders.

In 2025, smart crypto traders are no longer trading charts. They’re trading AI grades.

Conclusion

As the cryptocurrency trading industry matures, traders increasingly seek smarter, data-driven solutions that remove emotion, improve timing, and boost profitability. Token Metrics’ Real-Time AI Grades are delivering exactly that.

By combining real-time price action, on-chain analytics, volatility measures, liquidity flows, and machine learning models, Token Metrics has built one of the most advanced AI crypto trading platforms available today.

If you want to succeed in cryptocurrency trading — and stay ahead of fast-moving markets in 2025 — real-time AI grading is no longer optional. It’s the new standard.

Research

AI Crypto Trading - How Token Metrics AI Helps You Catch Every Crypto Narrative Before It Pumps

Token Metrics Team
8 min
MIN

In crypto, narratives don’t just tell stories — they move serious capital.

Every few weeks, a new sector takes center stage. One day it’s memecoins. The next it’s AI tokens. After that, it's Real World Assets (RWAs), restaking protocols, or something entirely new. The constant cycle of hype and attention creates volatile capital flows that most traders struggle to keep up with. By the time you realize a narrative is pumping, you're often already late. The smart money has rotated, and you’re left holding the bag as exit liquidity.

This is where Token Metrics steps in with a powerful solution: AI-driven Portfolio Rotation based on real-time narrative performance.

Instead of relying on gut feeling or Twitter hype, Token Metrics uses real-time data, AI-powered grading, and predictive analytics to help you rotate your crypto portfolio into the right narratives at exactly the right time. It’s built for traders who want to consistently stay ahead of capital flows, and it’s already live for Premium users.

Let’s dive deeper into why narrative rotation matters, how Token Metrics tracks it in real-time, and why this AI-powered system is changing the way traders approach crypto markets.

Why Narrative Rotation Matters

If you’ve been trading crypto for a while, you already know one core truth: attention drives liquidity. And in crypto, attention shifts fast.

Whenever a new narrative gains traction — whether it's driven by a protocol upgrade, macroeconomic news, or simply viral social media posts — the capital starts flowing:

  • Venture capital firms pump their favorite tokens tied to the narrative.
  • Influencers and alpha groups amplify the hype.
  • Traders chase short-term momentum looking for fast gains.
  • Retail investors arrive late and often buy the top.

This cycle repeats over and over. If you’re not rotating early, you end up entering the trade just as early participants are exiting. The trick is not just identifying strong narratives — it’s recognizing when they start to heat up, and moving capital accordingly.

Narrative rotation allows traders to continuously reallocate their portfolio toward the sectors that are attracting fresh liquidity — and more importantly — exiting fading narratives before they reverse.

In traditional markets, this level of active sector rotation often requires hedge fund-level resources. In crypto, with its fragmented data and 24/7 markets, it's even harder to pull off manually. That’s where AI comes in.

How Token Metrics Tracks Narratives in Real Time

The Token Metrics team recognized that crypto traders needed a smarter, data-driven approach to narrative rotation. So they built an entire system that tracks sector performance dynamically — in real time — across hundreds of tokens and multiple narratives.

Here’s how it works:

  • Curated Narrative Indices: Token Metrics has built multiple AI-curated indices that group tokens into active narratives such as Top AI Tokens, Top Memecoins, Top RWAs, and more. Each index represents a distinct narrative, aggregating multiple projects into a single performance tracker.

  • Live ROI Tracking: Every index is continuously monitored based on 7-Day and 30-Day ROI metrics. This gives traders instant visibility into which narratives are starting to outperform and where capital is rotating.

  • Real-Time Bullish/Bearish Signals: The platform applies AI-powered bullish and bearish signals across individual tokens within each index. This helps you gauge not only sector-level momentum but also individual token strength.

  • Trader Grade Scoring: Every token within each narrative is also scored using Token Metrics’ proprietary Trader Grade, which ranks tokens by short-term momentum, volatility, liquidity, and AI-driven signal strength.

In short, instead of relying on your gut instinct or waiting for narratives to trend on crypto Twitter, you’re seeing clear, data-backed signals the moment narratives begin to heat up — and well before retail crowds arrive.

What is AI Portfolio Rotation?

The real breakthrough is AI Portfolio Rotation. This isn’t just a dashboard that shows you sector performance. Token Metrics goes a step further by actually generating actionable portfolio rotation recommendations based on live narrative performance.

The system works like this:

  1. Monitor Narrative Outperformance: The AI monitors all active narrative indices, tracking which sectors are outperforming based on short-term ROI, momentum signals, and Trader Grades.
  2. Rotate Exposure Automatically: As narratives shift, the system automatically suggests reallocating exposure into the narratives that are gaining momentum.
  3. Select Top Tokens: Within each narrative, only the top-scoring tokens — those with the strongest Trader Grades and bullish signals — are included in the recommended allocation.
  4. Exit Underperformers: If a narrative weakens, or signals turn bearish, the system exits positions and reallocates capital into stronger sectors.

It’s essentially an AI-powered quant fund operating on narrative rotation logic — continuously adapting your portfolio allocation based on capital flows across narratives in real-time.

For traders, it turns the chaotic, unpredictable world of crypto narratives into a structured, rules-based trading system.

Example From the Webinar: AI → Memes → RWA

During the recent Token Metrics Premium webinar, the team showcased how AI Portfolio Rotation played out in the real market over just a few weeks.

  • AI Tokens Surge: After new OpenAI product announcements, AI-related crypto tokens like FET, RNDR, and AGIX began to outperform, attracting attention from traders anticipating a broader AI sector pump.
  • Memecoin Mania: Shortly after, celebrity-driven memecoin launches flooded the market, pushing memecoins like PEPE, FLOKI, and DOGE into the spotlight. The narrative shifted hard, and capital rotated into these high-volatility assets.
  • Real World Assets (RWA) Take Over: As macroeconomic narratives around tokenized assets and on-chain treasuries gained momentum, the RWA sector surged. Tokens tied to tokenization narratives, like ONDO or POLYX, saw significant inflows.

By using Token Metrics’ AI-powered system, traders following the dashboard were able to rotate their portfolios in sync with these capital flows — entering hot narratives early and exiting before momentum faded.

Who Is This For?

AI Portfolio Rotation isn’t just for advanced quant traders — it's designed for a wide range of crypto participants:

  • Swing Traders: Rotate across hot sectors with clear, data-driven insights.
  • Fund Managers: Systematically allocate capital across outperforming narratives while minimizing guesswork.
  • Crypto Builders & Analysts: Monitor sector flows to understand broader market trends and build better macro narratives.
  • On-Chain Traders: Actively manage DeFi portfolios and liquidity positions with narrative-aware positioning.

The point is simple: narrative allocation beats token picking.

Most traders spend hours debating which token to buy, but often fail to recognize that sector rotation drives much larger price moves than token fundamentals alone — especially in the short-term crypto cycle.

Token Metrics vs. Guesswork

To really understand the edge this provides, let’s compare:

Feature                                                                               Token Metrics AI Rotation               Manual Research

Live Narrative ROI Tracking                                              ✅ Yes                                ❌ No

AI-Driven Rotation Logic                                                   ✅ Yes                                ❌ No

Trader Grade Filtering per Theme                                    ✅ Yes                                ❌ No

Bullish/Bearish Signals                                                      ✅ Yes                                ❌ No

Performance vs BTC/SOL/ETH Benchmarks                   ✅ Yes                                 ❌ Time-consuming

While manual research often leaves you reacting late, Token Metrics transforms narrative rotation into an objective, data-powered process that removes emotional bias from your trading decisions.

The Bottom Line

AI-driven portfolio rotation gives you the ultimate edge in fast-moving crypto markets.

Instead of constantly chasing headlines, Discord alphas, or social media hype, Token Metrics allows you to:

  • Instantly see which narratives are gaining momentum.
  • Automatically rotate into top-rated tokens within those narratives.
  • Exit fading narratives before the crowd even realizes the shift.

It’s a systematic, repeatable approach to trading the strongest sectors in real time. And most importantly — it allows you to profit from the same capital flows that move these markets.

In a space where being early is everything, Token Metrics’ AI Portfolio Rotation may be one of the smartest tools available for crypto traders looking to stay ahead of narrative rotations.

This isn’t just better data — it’s better positioning.

Announcements

Best Crypto API for Automated Trading: How Zapier and Token Metrics Help Crypto Traders Win

Token Metrics Team
8 min
MIN

Zapier is a no-code automation platform that lets you connect different apps and workflows using simple logic. With this integration, Token Metrics becomes one of the most powerful crypto APIs available for automation.

Now, you can instantly stream insights from the best crypto API into your favorite tools—whether you're managing a community in Discord, running a trading desk in Slack, or tracking token performance in Google Sheets.

Imagine automatically alerting your team when:

  • A token’s Investor Grade turns bullish
  • The Sharpe Ratio crosses a risk threshold
  • A new coin ranks in the top 10 AI indices
  • A project’s Valuation Score improves week-over-week

That’s just the beginning.

Building a Real-Time Crypto Market AI Bot on Discord

Let’s break down one of the most exciting use cases: creating a crypto AI assistant in Discord that delivers real-time token insights using Token Metrics and Zapier.

Step 1: Set Up Token Metrics API in Zapier

First, connect your Token Metrics account to Zapier and select your trigger. Zapier will display available endpoints from the Token Metrics API, including:

  • Indices Performance
  • Investor and Trader Grades
  • Quant Metrics
  • Valuation Scores
  • Support/Resistance Levels
  • Volatility and Risk Metrics

For this walkthrough, we’ll use the Quant Metrics endpoint and monitor the token Hyperliquid, a rising star in the market.

Step 2: Pass Token Data to OpenAI (ChatGPT)

Next, we use OpenAI’s ChatGPT node within Zapier to interpret the raw token data.

The Token Metrics API provides rich data fields like:

  • Sharpe Ratio
  • Value at Risk
  • Price Momentum
  • Drawdown
  • Volatility Score
  • Valuation Ranking

In the prompt, we pass these values into ChatGPT and instruct it to generate a human-readable summary. For example:

“Summarize this token's current risk profile and valuation using Sharpe Ratio, Value at Risk, and Price Trend. Mention whether it looks bullish or bearish overall.”

The AI response returns a concise and insightful report.

Step 3: Send the AI Summary to Discord

Now it’s time to publish your insights directly to Discord. Using Zapier’s Discord integration, you simply map the output from ChatGPT into a message block and post it in a channel of your choice.

The result? A clean, formatted message with up-to-date crypto analytics—delivered automatically in real time.

Use Case Expansions: More Than Just One Token

This workflow doesn’t stop at one token.

You can easily expand your automation to:

  • Monitor multiple tokens using separate Zaps or a lookup table
  • Set alerts for changes in Investor Grades or Valuation Scores
  • Summarize weekly performance of indices
  • Compare Trader vs Investor sentiment
  • Deliver price support/resistance alerts to Telegram, Slack, or email

Every piece of this system is powered by the Token Metrics crypto API, making it one of the most versatile tools for crypto automation on the market.

Why Token Metrics API is the Best Crypto API for Automation

When it comes to building crypto tools, bots, or dashboards, data quality is everything. Here’s what makes Token Metrics the best crypto API to plug into Zapier:

✅ Institutional-Grade Data

We use AI, machine learning, and quantitative analysis to score, rank, and predict token behavior across thousands of coins.

✅ Full Market Coverage

Track tokens across top L1 and L2 chains like Ethereum, Solana, Avalanche, Base, and more.

✅ Actionable Signals

Our API includes pre-calculated metrics like Bullish/Bearish Signals, Investor/Trader Grades, Risk Scores, and On-Chain Sentiment.

✅ Scalable & Modular

Pull exactly the data you need—from a single token’s valuation score to an entire index’s historical performance.

What You Can Build Using the Zapier and Token Metrics API

With this integration, developers, traders, and crypto communities can now build:

  • AI Discord bots that auto-analyze any token
  • Crypto trading dashboards in Notion or Google Sheets
  • Investor alerts via SMS, Slack, or Telegram
  • Weekly market reports sent to your email inbox
  • Risk monitors for portfolio managers
  • Auto-updating content for crypto blogs or newsletters

Zapier’s drag-and-drop interface makes it easy—even if you don’t write code.

Example Project: Community-Run Trading Assistant

Let’s say you’re running a Discord community around DeFi or AI tokens. With this integration, you can:

  1. Use the Token Metrics API to fetch daily Quant Metrics for trending tokens
  2. Pass them into OpenAI for summarization
  3. Auto-publish to a #daily-market channel with the latest signal summary

You now have a fully autonomous crypto analyst working 24/7—helping members stay informed and ahead of market shifts.

Start Building Today

If you’ve been looking for a crypto API that’s both powerful and flexible—Token Metrics is it. And with our new Zapier integration, you can bring those insights directly into the tools you already use.

➤ Ready to build your first crypto AI bot?

  1. Sign up at https://www.tokenmetrics.com/api
  2. Get your API key
  3. Connect to Zapier
  4. Automate your crypto intelligence in minute

Click here to view the demo!

This is the future of crypto trading: AI-powered, automated, and deeply personalized.

Final Thoughts

Crypto markets don’t sleep—and neither should your insights.

With the best crypto API now available through Zapier, Token Metrics gives you the power to build anything: bots, dashboards, trading agents, alert systems, and more.

Whether you're an individual trader, a Web3 builder, or a fund manager, this integration brings automation, AI, and crypto intelligence to your fingertips.

Let’s build the future of trading—together.

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Perfect for Crypto Exchanges, SaaS Tools, DeFi, and AI Products