Investment consultants are often quick to state that past performance data is no guarantee of future outcomes. However, it is still relevant to include historical data in any financial market when analyzing assets and making forecasts. The future remains uncertain, and as few investors have access to a crystal ball, past performance data remains an integral part of the information needed for investment world decision making.
Using financial data for investment decisions requires data investors to rely on painting an accurate picture of the markets concerned.
Unfortunately, this is not the case because the average investor does not have timely access to reliable data in most markets to enable well – informed market decisions. The advent of blockchain technology enables financial data to be recorded and tracked without forged figures on the brighter side. In the future, when making decisions in the markets, the combination of blockchain technology and data aggregation will place the investor in a more advantageous position.
Data, not Hype, will restore the financial system’s investor trust
The lack of meaningful investment data is a more significant issue in new markets, and there are widely reported cases of wash trading and manufactured volume of transactions on a surprising number of exchanges in the cryptocurrency market. In cases like these, the use of trading volume to judge the general interest in a particular crypto asset becomes virtually impossible. Few crypto – whales or even exchanges make a stand without trading fees and could engage in wash – trading that often leads to price manipulation and exaggerated volume of trading.
If the exchanges are not qualified, the information may mean that a cryptocurrency asset with very little active investor inflow could still have a large market cap. The lack of meaningful data to be used as input for investment decisions makes crypto invest more like gambling, and some potential investors in such markets are only offset by the lack of reliable data and straightforward manipulation.
Blockchain – based data could provide clarity to investors and clean up all markets
Traditional markets such as venture capitalism, equity, and real estate are far from perfect as well. Financial data for these markets tend to cover asset performance over certain periods, and the time it takes to compile performance reports means investors don’t have real-time data that might help them make time-sensitive decisions.
Including all capital inflows and outflows from each sector invested in an asset and the corresponding dates would be a more comprehensive approach.
Ideally, this data should also be linked to general market sentiment, media events and other relevant factors and compared. Investors are usually the primary end – users of aggregated financial information from providers such as Finicity, Quovo, MX, and Intuit. This data typically involves compiling financial data to present the final information for meaningful analysis and interpretation in a digestible form.
In the cryptocurrency market, a typical example of aggregated financial data would include historical performance of crypto assets, the amount of investment in each asset, corresponding dates, and how all data relates to general market sentiment and major events. Investors equipped with such comprehensive data would be better placed to do better business.
Ideally, financial data stored on blockchain could easily be aggregated and the cost of accessing trading data should also be significantly reduced.
SeekingAlpha currently charges between $ 19.92 and $ 29.99 per month, while TradingView charges between $ 9.95 and $ 39.95 per month for accessing real – time trading data, breaking news and accessing unique trading tools. Many retail investors are unable to afford these services or do not feel that access to such information is worth the price because their investment scope may be limited to a particular sector or market, and many data providers use the one – size – fits – all approach by providing unnecessarily large amounts of data with access.
Generation Z & Y retail investors have access to accurate trading data and the ability to develop a low – cost diversified portfolio in a variety of sectors, benefiting from mobile trading platforms such as Acorns, Roobee and Stash.
More investment platforms need to record all the values and transactions on blockchain in order to provide credible and transparent investment so that no third parties and even founders can change the information.
In a recent interview with Forbes Roobee co – founder Artem Popov explained that “We are trying to level the financial market playing field and our goal is to provide retail customers with the same investment opportunities and security level as the biggest financial market players.”
Popov further explained that as he became more involved in investment and financial analysis, he noticed that “nearly any investment products are available to the general public since most investments such as venture funds, IPOs and commercial property are typically reserved for accredited and institutional investors, not retail investors.”
An investor would have to make sense of complex data from different sources in order to be able to make sound investments in each market, and clearly this can be a considerable headache for novice investors.
Data also shows that the new, younger investor generation is interested in investing and worried about their long – term financial futures, but is also increasingly skeptical about banks and Wall Street brokerages. They are quickly overwhelmed by the thought of having to sift through hundreds of indexes, and this group would instead enjoy the simplicity of gamified, transparent, low – effort ‘ automated ‘ investment rather than attempting to decipher complex financial data.
Eventually, the impact of aggregated data platforms based on blockchain will be deeper on the cryptocurrency market, where churning out manufactured figures is common for different entities. Replacing misleading crypto – performance metrics with aggregated blockchain – based data would give investors an insight into the actual status and fair value of crypto – currency projects and lead to more transparency and efficient investment.
Unchangeable financial data will level the playground
An innumerable number of investment offers are placed on the market each year, each providing varying degrees of transparency, and often the return on the asset or investment is not natural for the public to locate. Additional transparency will be provided by integrating blockchain technology into managers of financial products, transactions and performance outcomes. Investor confidence in different financial markets also stems from having access to comprehensive data, and investors are likely to invest their funds more comfortably in markets when they are well informed and knowledgeable.
Data shows that retail investors are partially leaving the cryptocurrency and ICO markets due to lack of transparency and general mistrust of financial data.
As many millennials are extremely skeptical about financial institutions for a variety of valid reasons, the same can be said for traditional finance. The confidence of retail investors in these markets could increase when blockchain – based financial aggregate data are made available to them, and the recovered confidence could translate into higher trading volumes and more sophisticated and institutional investors arriving.
In addition, blockchain technology will ensure that financial service providers scrutinize the investment assets they offer carefully and that performance data are also carefully reported. All of these measures will help users understand better the tools they choose for their portfolio and invest in the best – performing ones.
A lack of transparency is one of the main issues that complicates investors ‘ ability to make informed investment decisions to this day. The aggregation of financial data provides more purposeful and comprehensive data for investors, and the integration of blockchain technology injects more transparency into the data delivery process. Ultimately, innovative technologies such as these will provide the average investor with more power and control.