According to Charles Edwards, founder of Capriole Investments, up to 99% of on-chain metrics add nothing but noise to investment decisions. As reported by BeInCrypto's Market Intelligence experts council, this warning comes as institutions move deeper into crypto data verification. Julio Moreno, Head of Research at CryptoQuant, confirms that professional desks now verify on-chain numbers against traditional data they already trust. Large players no longer accept numbers simply because they appear on a dashboard, instead requiring contrast with established data sources.
As reported by BeInCrypto, the same metric can produce different results across platforms due to varying calculation methods. Edwards explains that people call a metric something but then the question is how it's calculated in the back end, and that's up to the platform. The differences stem from data sources, normalization choices, and how each provider handles gaps. Most leading data platforms publish thousands of metrics, yet few explain these methods clearly, creating confusion for investors.
The most dramatic example of methodology differences emerged during the FTX collapse in November 2022. According to CryptoQuant's exchange reserves data, FTX held 20,177 BTC on November 6, 2022, and just 0.64 BTC by November 8. As reported by BeInCrypto, the reserves drained before the price breakdown, with on-chain data flagging stress days before market reaction. Moreno notes that disagreement between providers stems from how each one groups addresses, with some being more aggressive in clustering while others remain conservative.
As reported by BeInCrypto, institutions have fundamentally changed how they treat on-chain data, no longer accepting numbers at face value. Moreno explains that institutions now contrast on-chain numbers with their traditional data to ensure accuracy. This verification process represents a significant shift from the retail trading edge that on-chain analytics began as, with banks, funds, and asset managers now demanding the same rigorous analysis that traditional financial data provides.
According to Edwards, 90-95-99% of metrics are not really going to add anything except noise to investment models. His firm Capriole Investments builds models from a small, tested set of signals, including their Macro Index that combines more than 60 on-chain, macro, and equities metrics into one oscillator. As reported by BeInCrypto, for institutions evaluating data providers, the key takeaway is studying methodology behind metrics rather than simply accepting displayed numbers. This focus on transparency now shapes industry awards for digital asset firms as more large players enter the market.
