How to do cryptographic investment base analysis
The cryptocurrency world has gained enormous popularity in recent years, attracting a wide range of investors from different environments. However, investment in encryption can be very speculative, making it essential to make a complete fundamental analysis before making any investment decision. In this article, we will study the basics of fundamental analysis and provide stages stage guidelines on how to make a comprehensive analysis of cryptographic investment.
What is fundamental analysis?
Basic analysis refers to the process of evaluating the true value of the asset based on its underlying economic and financial characteristics. This includes data such as market capitalization, revenue growth, profitability, competition, management teams, industry trends and more to determine if a specific cryptocurrency has great long -term growth potential.
Why is the fundamental encrypted analysis important?
In the encryption market, fundamental analysis plays an important role in identifying undervalued assets that have the potential to increase significantly. However, it is important to note that the cryptographic market is very volatile and prices can float rapidly. Therefore, investors must be prepared to adjust their strategies as market conditions develop.
Gradual Guide for Fundamental Analysis of Cryptographic Investment
- Explore cryptocurrency
Start studying cryptocurrency in which you are interested in investment. Explore them:
* Development team
* Case and purpose of use
* Market demand and adoption
* Technical analysis (eg graphics, diagram)
- Evaluate its economic properties
To evaluate the following factors:
* Market capitalization: compare -with other cryptocurrencies in the same room
* Revenue growth rate: Evaluate cryptocurrency revenue flows and future growth potential
* Profitability: Analyze the cryptocurrency profitability reserve and the burning of money
3
Analyze your competition and market position
Explore the competition:
* Identifying the main members of the market
* Evaluation of their strengths, weaknesses and strategies
* Evaluation of market share and consolidation potential
- Review Industry Trends and Perspectives
Trends and perspectives investigated in the cryptocurrency space:
* Reading sector messages and studies
* Consulting related field experts
* Analysis of regulatory development and change of government policy
- Evaluate the management team and consultants
Appreciate:
* Experience and achievements of the main team members
* Antecedents and credentials of the counselors
* Potential for disorders or innovation
- Review the structure and regulatory compliance
Explore the following factors:
* Government rules and their influence on the cryptocurrency space
* Compliance requirements and possible risks
- Make a technical analysis chart
Evaluate the graphs to identify:
* Price Movement Standards and Trends
* Support and resistance level
* Indicators like RSI, MACD and BOLLINGER BAND
Example: Basic Bitcoin Analysis
Let’s use Bitcoin (BTC) as an example:
1
Market capitalization : Compare the BTC with other cryptocurrencies with market capitalization similar to 30% of the total market.
2.
3
Economic properties :
* Revenue: Bitcoin revenue flows include transactions, mining and advertising income.
* Profitability reserve: BTC is a relatively high profitability reserve due to large market capitalization.
- Competition : Compare the BTC with other cryptocurrencies with similar properties in the same room.
5.