Crypto Research: How to Collect Cryptocurrency Data for Educational Purposes

Universities worldwide are increasingly focusing on cryptocurrency studies to understand financial innovation, test economic theories in digital markets, and assess the technological impact of blockchain systems. Through systematic data collection and analysis, researchers can examine market efficiency, social impacts, and the complex interplay between traditional and digital financial systems.

Establishing proper data collection methodologies for educational institutions venturing into cryptocurrency research is crucial, as it forms the foundation for meaningful analysis and insights. As it happens, the most important task of collecting the right and high-quality data is simultaneously the most challenging. Fortunately, there are tools to make the lives of researchers much easier.

Prior Experience and Knowledge

While having prior experience and knowledge in finance, economics, or computer science can be advantageous when diving into the crypto world, it’s not a prerequisite. Many successful crypto investors and traders have built their expertise through online courses, tutorials, and hands-on experience. However, a basic understanding of investing, financial markets, and risk management can be incredibly beneficial in making informed decisions within the crypto market. Staying up-to-date with the latest news, trends, and insights in the crypto world is also essential. This continuous learning process will help you navigate the market more effectively and develop sound investment strategies.

Why is collecting data from the crypto world challenging for universities and analysts?

The difficulties arise from the very nature of the cryptocurrency market, which is highly complex and dynamic. Universities and analysts often discover numerous challenges when collecting cryptocurrency data. To grasp the whole perspective and draw overall conclusions, it’s necessary to consider that there are multiple data sources and thousands of trading pair combinations. On top of that, trading occurs 24/7, not only on each of the exchanges separately but also in cross-exchange arbitrage activities.

Another barrier, especially for universities, is technical challenges. Researchers need a robust infrastructure and high storage capacity to handle large data volumes. Moreover, integration with multiple data sources (both historical and real-time) can be costly and time-consuming.

In addition, there are data quality and consistency issues:

• Fragmented data across multiple exchanges
• Inconsistent timestamp formats and time zones
• Missing data during exchange downtime
• Price discrepancies between sources
• Lack of standardized data formats

Fortunately, most of these challenges can be overcome easily - we’ll tell you about the solution later in this article.

Sources of Cryptocurrency Data

There are numerous sources from which you can collect cryptocurrency data, each offering unique insights into the market. These include:

• Online exchanges and trading platforms: These platforms provide real-time data on price trends, trading volumes, and market movements.
• Blockchain explorers and analytics tools: These tools offer detailed information on blockchain transactions, network activity, and other on-chain metrics.
• Crypto news websites and blogs: Staying informed through reputable news sources and blogs can provide valuable market insights and updates.
• Social media and online forums: Platforms like Twitter, Reddit, and specialized crypto forums are great for gauging market sentiment and discovering emerging trends.
• Research reports and academic studies: These documents offer in-depth analyses and findings from experts in the field, providing a solid foundation for your research.

However, for serious research companies and universities, it all boils down to one dilemma:

Choose a data provider or collect information manually?

The answer to this question defines whether you prefer to invest in a data provider to save time or collect information manually to save money. Collecting cryptocurrency data by integrating with multiple data sources individually seems like a cost-effective choice, however, it’s a time-consuming and resource-intensive process. Each exchange requires separate API integration, different authentication methods, and unique data formats, leading to significant development time and ongoing maintenance costs. Universities often need to allocate dedicated development teams to build and maintain these integrations, which can take several months to implement properly. The process involves not only writing custom code for each exchange but also handling various technical challenges such as different rate limits, API downtimes, and inconsistent data formats. As a result, researchers and analysts wait a long time just to get started, plus they have to spend time checking and correcting data, rather than doing the research itself.

When choosing a provider, you need to take into account the cost of data transfer which is usually based on the number of queries to the API or the amount of information downloaded. Nevertheless, the price lists are flexible, so everyone can find a suitable option. But the best news is that choosing a data provider solves all the challenges mentioned earlier and benefits with:

• Accelerated implementation and project start-up time many times
• Access to data from hundreds of cryptocurrency exchanges
• Standardization - you get action-ready data
• You leave the maintenance of exchange connections to the supplier, while you can take care of the research

How to collect data for research in real time?

Collecting real-time cryptocurrency data for research requires a significantly more complex infrastructure compared to gathering historical data. While historical data can be easily downloaded in convenient CSV files and stored in conventional databases, real-time data collection demands a more sophisticated approach. It requires establishing WebSocket connections with major cryptocurrency exchanges to capture price movements, order book changes, and trading activity as they occur in real time. The solution to this problem is to choose a provider of cryptocurrency APIs like CoinAPI, which provides all possible connection protocols, including WebSocket, and is integrated with more than 360 exchanges. The only requirement is to have a computing environment (for example analytical software) to integrate with the CoinAPI’s platform. This will give you access to all data sources you need and beyond.

Historical cryptocurrency data for educational purposes

You can retrieve historical data as you’re comfortable - either by querying the REST API or downloading files in CSV format directly into your analytical tools. Both options are a good way to bulk download data from multiple sources so that it’s immediately ready for analysis and comparison.

Choosing CoinAPI’s Market Data API, Indexes API, or Flat Files provides you with access to a wide range of cryptocurrency data from multiple crypto exchanges (both CEX and DEX). It also solves the problem of fragmented data, lack of standardization, and inconsistency, allowing you to analyze the market holistically. Historical data often includes buy and sell transactions, which are crucial for comprehensive market analysis.

CoinAPI aggregates data from hundreds of cryptocurrency exchanges, consolidating diverse datasets into a single, comprehensive platform. This eliminates the need for researchers and developers to interface with multiple exchange APIs individually, reducing data fragmentation. Moreover, CoinAPI employs standardized data schemas across all data types and sources. This uniformity ensures that data from different exchanges adheres to the same structure, facilitating seamless integration and analysis. For example, price data from various exchanges is converted to a common currency and time zone, ensuring consistency across datasets.

What types of data do universities download most often?

Universities commonly focus on collecting several key types of cryptocurrency data for their research:

• OHLCV (Open, High, Low, Close, Volume) Real-time trade data
• Order book depth
• Trading volume
• Exchange rates
• Full order book
• Bid-ask spreads
• Crypto indexes

CoinAPI provides universities with comprehensive cryptocurrency data suitable for academic research. This includes real-time and historical data such as OHLCV, order books, and various market metrics mentioned above, enabling in-depth analyses and the development of financial models.

Collaborative Access for Research Teams

In scientific projects, the entire team must have an equal view of the data. This is another challenge you can solve by choosing a trusted cryptocurrency data provider. Using CoinAPI, you can provide API keys to your research assistants or team members to facilitate data collection and streamline your research processes. This ensures efficient handling of data requests and enhances collaboration within your team. Encourage your research teams to sign up for collaborative data access tools to further streamline their research processes.

Key findings

1. Universities are increasingly studying cryptocurrencies to understand financial innovation, test economic theories, and assess blockchain technology's impact, making proper data collection methodologies crucial
2. Technical infrastructure requirements and data quality and consistency issues are the most common challenges researchers struggle with
3. Real-time data collection requires sophisticated infrastructure and WebSocket connection to crypto exchanges
4. CoinAPI is suggested as a solution, offering integration with over 360 exchanges