Key takeaways
-
ChatGPT helps simplify complex crypto projects by summarizing white papers, explaining use cases and breaking down tokenomics.
-
Researching the team, partnerships and security risks is crucial before investing in any crypto token.
-
Comparing projects with competitors highlights strengths and weaknesses for better decision-making.
-
ChatGPT can suggest relevant research questions, acting as a guide for beginners and experienced investors alike.
Investing in cryptocurrency can be exciting and overwhelming, especially with the thousands of coins and tokens available today. From Bitcoin (BTC) and Ether (ETH) to lesser-known altcoins and memecoins, the market is flooded with opportunities and risks. Before investing your money, proper research is essential.
That’s where ChatGPT can help.
This article walks you through how to use ChatGPT to research cryptocurrency projects (using different projects as examples), assess their credibility, and make smarter, data-informed investment decisions. Whether you’re a beginner or a seasoned trader looking to streamline your workflow, ChatGPT can be a powerful research assistant.
Why research matters in crypto investing
Unlike traditional stocks backed by earnings reports and regulatory filings, crypto assets often lack standardized financial data. Instead, you must sift through white papers, GitHub repositories, community sentiment and more. Failing to do proper research can lead to investing in overhyped or even fraudulent projects.
Crypto scams can take many forms, but here are a few common examples to illustrate why research is crucial:
-
Rug pulls: These occur when developers create a new token, promote it heavily to attract investors, then suddenly withdraw all funds, leaving investors with worthless tokens. A notorious case was the “Squid Game” token in 2021, which surged in price before the creators vanished with millions.
-
Pump-and-dump schemes: Groups artificially inflate a coin’s price by spreading false hype, only to sell off their holdings at a profit, crashing the price and leaving others with losses.
-
Fake projects or plagiarized white papers: Some tokens have white papers copied from legitimate projects or contain vague, technical jargon that obscures a lack of a real product or team.
-
Pig butchering: Scammers build long-term relationships to gain trust, then convince victims to invest heavily in fake crypto projects, eventually stealing their funds.
-
Deepfake scams: Sophisticated AI-generated videos or audio impersonate influencers or company executives to trick people into sending crypto or revealing private keys.
-
Cybersquatting: Fraudsters register domain names similar to legitimate crypto projects or exchanges to mislead users and steal credentials or funds.
-
Phishing and fake websites: Scammers create websites that mimic popular tokens or exchanges to steal private keys and funds.
Thus, before investing in any coin, it’s critical to verify these fundamental points:
ChatGPT can help you answer all of these questions, faster and more clearly.
Did you know? Scammers have impersonated Coinbase in phishing attacks by sending fake emails or text messages that look like official Coinbase alerts. These messages often ask users to click on malicious links to “verify” their account or “resolve security issues,” tricking them into revealing login credentials or transferring crypto funds. Always double-check the sender’s email address and access Coinbase through their official website or app to avoid falling victim to these scams.
Step-by-step: Using ChatGPT to research crypto projects
Here’s how to use ChatGPT effectively when researching coins before investing:
1. Start with a project summary
Use ChatGPT to generate a high-level overview of any coin. This helps you quickly understand the project’s purpose and goals.
Example prompt:
“Explain what Bitcoin Hyper (HYPER) does in simple terms.”
As observed, ChatGPT can break down complex technical language and help you grasp the core idea, even if you’re not a blockchain developer.
2. Get a breakdown of the white paper
White papers are foundational documents that outline a crypto project’s technology and roadmap. They can be technical and dense.
ChatGPT can scan or summarize white papers (if you paste them in) and give you a readable version of what matters most, saving you time while retaining clarity.
Example prompt:
“Summarize the main points of the Stellar white paper.”
3. Check the use case and market fit
Many coins promise innovation, but do they solve a real-world problem? To find out, you may ask ChatGPT to help you assess the utility of a coin.
Example prompt:
“What problem does Chainlink solve, and who uses it?”
This gives you context around how the project fits into the broader ecosystem.
4. Evaluate the team and partners
A credible founding team and strong partnerships often signal legitimacy and execution potential.
Example prompt:
“Who founded the Avalanche blockchain and what’s their background?”
5. Assess tokenomics
Tokenomics refers to how a coin’s supply, incentives and distribution are structured. Poor tokenomics often lead to inflation, rug pulls or price crashes.
Example prompt:
“Explain the tokenomics of the Hedera (HBAR) coin. What’s the total supply and how is it distributed?”
6. Check for compliance and security concerns
Security and regulatory issues can derail even the most promising crypto projects. You could ask ChatGPT for risk factors.
Example prompt:
“Has Tether USDt (USDT) faced any regulatory issues?”
7. Compare with competitors
Understanding how a coin compares to others in its category (DeFi, layer 1, NFTs, oracles, etc.) helps you identify strengths or weaknesses.
Example prompt:
“Compare Sui and Sei blockchains in terms of scalability and interoperability.”
You can even ask for pros and cons in table format to make analysis easier..
Did you know?ChatGPT was trained on a massive data set of diverse text from books, websites and articles, enabling it to generate informed answers across many subjects.
Bonus tip: Ask ChatGPT what you should be asking
If you’re new to crypto, you might not know which questions to ask. Try this:
Example prompt:
“I’m considering investing in a new crypto token. What key things should I research or look out for?”
ChatGPT can give you a checklist covering fundamentals, technicals, sentiment and security, perfect for building your own research framework.
Did you know? ChatGPT’s architecture is based on the transformer model, which uses self-attention mechanisms to understand context in text, enabling it to generate coherent and context-aware responses.
What ChatGPT can’t do (yet)
While ChatGPT is a powerful research assistant, it’s important to know its limitations:
-
No real-time data unless integrated with tools like web browsing or APIs.
-
No investment advice or guaranteed predictions.
-
May generate outdated or incorrect info (always verify facts).
Whether you’re investing a small amount like $10 or a significant sum such as $10,000, doing thorough and careful research remains your best defense against risks. Fortunately, AI tools like ChatGPT now make it easier than ever to gather insights, organize information and ask the right questions.
It’s vital to use ChatGPT to supplement your research process, not as a replacement for your critical thinking and due diligence.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.