Category: 3. What is Fundamental Analysis?

Fundamental Analysis is broad and far reaching, with this article only skimming the surface. At some point however, you’ll need to draw a line and decide whether to invest or not. Though Technical and Fundamental Analysis are very different approaches they can complement each other. If you’ve conducted your Fundamental research on a cryptocurrency that… Continue reading Entry point & DCA

Though cryptocurrencies don’t have familiar revenue based metrics they do are metrics that are useful. Market Capitalisation This is the number of coins in circulation (aka Circulating Supply) times price. On its own it’s a metric that should be treated with caution, as it can be spoofed or reflective simply of manipulation like pump and… Continue reading Financial Metrics

Though the what, why and how framework are useful, alone they aren’t enough to charge ahead and invest in the long term success of a new cryptocurrency. Right now there are over 3,000 coins and tokens each proclaiming their own unique use case. Success will depend on whether they are the only project offering a… Continue reading Competition & Differentiation

Though Fundamental Analysis is a different discipline to Technical Analysis, they do at times overlap. We’ve already introduced the value of on chain metrics as leading indicators of price change. When looked at in a broader sense, they give invaluable insight into the potential long term success of a project.For cryptocurrency projects that are live… Continue reading On Chain Metrics

A great example of a bitcoin price model that quantifies the potential value based on its actual function is the Stock-to-flow, created by Plan B for Bitcoin.  Being the first cryptocurrency and a completely novel technology it was very difficult to model the potential impact of Bitcoin’s potential as a store of value. Stock-to-flow focuses on scarcity as the… Continue reading Quantifying the Solution

One of the simplest ways to evaluate interest in a given cryptocurrency project is using Google search sentiment, which is available via the Google Trends feature. This enables you to look at the historic interest in a search term, and see when the peak of interest was reached. Google Trends uses an index measure, where 100 is… Continue reading Google Trends

As part of the description of how a cryptocurrency project intends to solve the specific problem identified, should be reference to data that quantifies both the problem and the solution. Data that quantifies the problem enables you to get a sense of the size of the opportunity and is useful for evaluating before a project is live.… Continue reading Usage & adoption metrics

If you are investing your hard-earned money, you need to have confidence in your own decisions but this doesn’t mean you cannot refer to the opinions of others to help validate the claims in a white paper or live project. As the recent WallStreetBets drama highlighted, forums like Reddit can rival professional analysts in terms… Continue reading Standing on the shoulders of giants

Bitcoin’s whitepaper is only nine pages long. Page one is dedicated to articulating the what/why, with the rest of the document – aside from the conclusion – explaining exactly how Bitcoin solves the double spend problem. Those eight pages essentially validate the headline claims, and the devil is always in the detail. A cryptocurrency may… Continue reading Validation

A good place to start with Fundamental Analysis of a cryptocurrency is asking the simple question – what problem is it trying to solve?  This may sound obvious, but it is very easy to be seduced by complex language and ambition, without thinking about what a cryptocurrency does and what real world problem it solves. If… Continue reading What problem is a cryptocurrency trying to solve?