Can emotions also be traded? KOLECT raises $1.2 million, with Amber Group and other institutions optimistic about the new paradigm

KOLECT completes $1.2 million Pre-Seed funding, led by Amber Group’s Web3 accelerator amber.ac, with Wonder Capital Group and GC Capital participating. Behind this funding event reflects an interesting market phenomenon: using KOL and social media sentiment signals to drive trading strategies is moving from concept to reality and gaining recognition from institutional capital.

Innovative Attempts Behind the Funding

Project Positioning and Funding Scale

KOLECT is a sentiment-driven quantitative trading infrastructure platform. Its core idea is to convert social sentiment in the crypto market into actionable trading strategies. Although this round of funding is not particularly large, the backgrounds of the participants are noteworthy—Amber Group, a well-known trading and investment firm in the crypto industry, choosing to lead KOLECT indicates that this direction has gained recognition from top-tier institutions.

The use of funds is also quite specific, mainly focusing on four areas:

• Expanding the sentiment database by integrating more KOLs and social signal sources
• Developing a zero-code strategy builder to enable non-technical users to create strategies
• Improving backtesting capabilities to enhance strategy reliability
• Building CEX and DEX execution systems to realize a closed loop from signals to trades

This setup appears very clear: the goal is to hardware, process, and make tradable the “soft data” of social signals.

Sentiment database of over 3000 KOLs

KOLECT claims to have integrated market sentiment data from over 3000 KOLs. The significance of this number lies in representing a sizable information source. In the crypto market, KOL influence is tangible—a single tweet or opinion can trigger capital flow changes. KOLECT aims to transform these dispersed, qualitative sentiment signals into quantitative, tradable strategy signals.

A question worth pondering is: how reliable are sentiment signals? According to relevant observations, market participants note that on-chain active addresses are increasing, and signs of retail investor entry are evident, providing a basis for sentiment-driven trading—when more market participants are involved and retail share rises, social sentiment’s influence on the market indeed strengthens.

Market Significance of a New Trading Paradigm

Why Major Institutions Favor This Direction

A representative from Amber Group stated, “Social trading will become an important driving force in the crypto market. We believe this will reshape traditional investment and trading models.” Several logical points underpin this judgment:

First, the structure of market participants is changing. The crypto market has evolved from early tech geeks and professional traders to an ecosystem with a large number of retail investors. Retail behavior tends to be more emotional, and emotions can drive price volatility. Quantifying this emotion allows early detection of market trend changes.

Second, democratization of information access. In the past, institutions profited from informational advantages. Now, the cost of obtaining information has dropped significantly, and information flows on social media are extremely fast. Those who can process and utilize this information more quickly gain an edge. KOLECT’s zero-code strategy builder lowers the barrier to leveraging this advantage.

Third, diversification of trading strategies. Traditional quantitative trading relies on historical data and technical indicators, but market environments are changing. Emotion-driven trading offers a new dimension that can be combined with traditional strategies to improve overall adaptability.

Potential Market Impact

If emotion-driven trading truly becomes mainstream, several market changes could occur:

• Increased liquidity: More retail participation in strategy trading means higher trading volume and liquidity.
• Potential rise in volatility: Emotion-driven strategies can create herd effects, amplifying price swings.
• New trading opportunities: Strategies that accurately capture sentiment turning points may generate excess returns.
• Increased risks: If large amounts of capital follow the same sentiment signals, adverse reversals could lead to significant risks.

Summary

KOLECT’s successful funding marks the entry of sentiment-driven trading from niche concept to institutional attention. This not only reflects the crypto market’s exploration of new trading paradigms but also highlights a reality: in an era of increasing retail participation, social sentiment has become an unavoidable market force.

From an investment perspective, the core value of this approach lies in whether sentiment can be accurately converted into trading signals. From a market perspective, if such platforms succeed, they could alter the liquidity structure and trading ecology of the crypto market. Future focus should be on KOLECT’s actual operational performance and how well sentiment-driven strategies perform in real trading, including win rates and risk profiles.