Blockchain analytics startup Coin Metrics has closed a $1.9 million seed round with Fidelity Investments, Highland Capital Partners and Dragonfly Capital.

Announced today, the startup also released its first suite of commercial products for institutions seeking customized research reports.

Coin Metrics co-founder and board chairman Nic Carter told CoinDesk that institutional investors aren’t satisfied with the current crop of price aggregation services that don’t distinguish the integrity of different data sets.

“One thing we’re looking at is building out whitelists of exchanges so that the market reference rates are actually based on credible exchanges, as opposed to exchanges that engage in wash trading and other types of nonsense,” Carter said. (Castle Island Ventures, an investment firm he co-founded, led the round.)

Aside from looking at exchange activity and prices, Coin Metrics also analyzes blockchain data with a methodology that aims to help traders cut through the noise, as Carter put it. For example, purchasing bitcoin on an exchange platform might lead to several hops across wallets related to the platform’s back-end storage. Failing to account for such patterns could artificially inflate transaction data.

“Not all of this is meaningful and economic, only a fraction of this is," Carter said of the importance of correctly mapping patterns of activity on the blockchain.

Meanwhile, ConsenSys and Thomson Reuters alum Tim Rice, the CEO of Coin Metrics since November 2018, will “drive market data products for institutions,” according to Carter. Rice will strive to translate traditional securities metrics to the cryptocurrency market.

“We’ll be offering not only network data, but also market data and indexes as well,” Rice told CoinDesk. “We have approximately 15,000 IP addresses coming onto our site on a weekly basis, and we believe we can convert 20 percent of those into paying customers.”

Dragonfly Capital co-founder Alex Pack told CoinDesk he’s eager to see more mature metrics applied to the space.

“There are a lot of competitors,” Pack told CoinDesk. “But the thing we liked most about Coin Metrics is they are crypto natives who have been around for years with a nonprofit, open source model.”

Fidelity, meanwhile, is on the cusp of launching a digital asset trading and custody service for institutional clients, so its interest in supporting high-quality research for the space makes sense.

"Coin Metrics, Inc., delivers transparent and actionable data to various industry stakeholders," Fidelity said in a blog post. "We applaud their achievements and look forward to working alongside their talented team to interpret crypto-assets market and network data."

Several startups are rushing to accommodate the growing demand for blockchain analytics. Chainalysis, the incumbent startup in the space, raised $30 million earlier this month to expand services in Europe. Italian startup Neutrino was recently acquired by crypto exchange Coinbase. Those two firms, however, focus on tracking bad actors and helping businesses comply with regulations more than providing investment insights like Coin Metrics.

Squarely in the institutional investor space, though, is the analytics startup Flipside Crypto, which raised $4.5 million in November 2018 from Coinbase Ventures and others.

Coin Metrics started out as an open source hobby project in 2017 with its two cofounders – Carter and software engineer Aleksei Nokhrin – spending the subsequent years bootstrapping before this modest raise. The startup now has more than 12,500 Twitter followers and several free software tools.

“We basically built an Excel-like charting tool that lets your run statistical analysis on charts from your browser directly,” Carter said. “There’s a commercial aspect to it now, but that open source, cypherpunk ethos will definitely remain.”

Nic Carter at Consensus: Invest 2018 image via CoinDesk archives

UPDATE (Feb. 27, 23:25 UTC): This article has been updated to note Castle Island Ventures' participation in the round and to add a statement from Fidelity.