How to Gain Alpha With CoinGecko Categories

How to Find Alpha With Categories on CoinGecko

Users can identify trading opportunities by tracking categories on CoinGecko, where coins are categorized thematically based on the storyline or trading narrative they are based on. 

Key Takeaways

• Crypto categories became increasingly important with the rise of memecoins and its thematic appeal, necessitating the need for qualitative categorization.

• Users can validate and find new trading narratives through the usage of categories.

• Categories can also be used to flag out trading anomalies and identify outperformers.

In a messy world with thousands of coins launched daily, it can be hard for users to differentiate the unique selling points of each coin. This is especially hard given the lack of apparent utility of most of the newly launched coins. One way in which users are able to identify trading opportunities is through the unique way of categorizing coins thematically based on whichever storyline or trading narrative they are based on.

The Evolution of Crypto Categories

Traditionally, crypto categories are  based on their utility and functionality. This proved to be a simple but effective technique for understanding the relationship between different crypto tokens. Crypto categories such as Layer 1s, Decentralized Finance (DeFi) and Non-fungible Tokens (NFTs) are self-explanatory ways to categorize many crypto tokens and continue to provide a useful overview of the crypto ecosystem.

However, quantifiable categories begin to break down in usefulness when users further categorize and group crypto tokens colloquially based on market happenings. Categories such as Sam Bankman Fried (SBF) tokens, Murad’s List, Made in USA, Venture Capitalist Coin (VC coins) became important considerations of many users due to market movements, but these nuances are not captured by traditional categorization. 

Categorizing tokens based on current market happenings require a qualitative and hands-on approach which can be hard to achieve. Wanting to understand the right way to do this, the CoinGecko team surveyed frequent users of our platform and we are proud to share with you our findings and our discovery in how the best users use categories to find hidden crypto gems.

This article was written by Loke Choon Khei using the findings of a survey done by our UI/UX researcher, Grace Zhang.

Top 6 Trending Categories Today 🔥

1. Solana Meme
2. Wallets
3. Elon Musk-Inspired
4. Meme
5. Dex Aggregator
6. Alleged SEC Securities

What categories are you watching? pic.twitter.com/sBOZy0kxEF

— CoinGecko (@coingecko) February 27, 2025

Insight 1: Identifying Trading Narratives Through Categories

The success of most memecoins is short-lived. Memecoins rise and fall within a day, and social media buzz around memecoins on Telegram and X can be an “echo chamber” where bullish/bearish opinions are repeated and amplified. Due to this, users can sometimes struggle to find a trading narrative. We found that users use CoinGecko categories as a way to validate and find new and potentially trending categories to act on.

An example of how CoinGecko categories are used by users:

In the above example, users used the homepage of CoinGecko to find trending categories, before doing their due diligence on X, Telegram, etc. which then further builds their conviction onto this new category, “DeFAI”, as a trading narrative.

Insight 2: Identifying Trading Anomalies through Categories

Another valuable use of categories is the ability to visualize the price movements of the crypto markets in an efficient manner. Users first start with an overview category such as “Meme Coin” before making use of our category heat map feature through the “Key Statistics” button. 

The heat map allows users to identify trading anomalies, to help them narrow their selection down in order to find outperformers. “Category Trees” allow users to expand subcategories in a similar heat map which will show them exact tokens which are outperforming in that particular subcategory.

As an example, let’s look at the best performing category under “Meme”: “PolitiFi”, which shows an overwhelming dominance of TRUMP.

Insight 3: Using Categories to Do Due Diligence

Even when not trading, we found that users sometimes use categories as a way to keep up to date with the markets and to understand current trends. Trending categories push our users to do further research on their own to understand why certain topics are trending, and CoinGecko makes this easy with news updates on specific categories.

For example in the screenshot below, users can discover up to date news and articles about the “Layer 1 (L1)” category.

Conclusion

We hope you enjoyed using our categories system, and if you didn’t know about this, we hope you check it out at https://www.coingecko.com/en/categories.

Do note that CoinGecko categories are for informational purposes only, and users should do further research on any tokens they wish to trade.