What Is Fundamental Analysis In Cryptocurrencies

As it is the most expensive cryptocurrency, Bitcoin never fails to attract traders. Though the prices of Bitcoin and other cryptocurrencies go up and down, crypto trading is highly profitable when you know how to analyze bitcoin and other cryptocurrencies. Bitcoin analysis provides you with a good idea of the present and future scenarios. 

The outcome of this analysis tells you when to invest and how much. If you are really good at Bitcoin analysis, you can make informed investment decisions. You can learn more about market trends. 

To know how to analyze Bitcoin, you need to learn about the following two types of analysis:

  • Fundamental analysis 
  • Technical analysis 

In this article, we will cover fundamental analysis. This analysis covers aspects that affect the overall value of an asset. 

Understanding The Basics 

This method measures the intrinsic value of an asset. It examines financial and economic factors related to the asset. Fundamental analysis studies all the key factors such as industry conditions, economy, company’s management etc. The goal is to figure out a number that is comparable with the current price of the asset. This tells if the asset is overpriced or under priced. 

However, you also need to take fundamental changes into account. These fundamental changes can have a big impact on the value of the asset. The market reacts to these changes.

Fundamental Analysis In Cryptocurrencies

Cryptocurrency projects are different from traditional companies. You don’t have to go through a lot of data. Cryptocurrencies are new as compared to stock and other markets. When it comes to analyzing an investment, you need to look out for the following factors. 

Target Market

A product exists because there is a target market. The size of the market is an important factor. A larger target market does not always mean more money. Small, niche markets can be better than over-saturated larger markets. 


See the number of competitors. Whether you want to invest in real estate, stock market, or cryptocurrencies, figure out what you will do about this competition. 


You need a team to be a successful cryptocurrency trader. Figure out what you can do with available resources. 


Every cryptocurrency has a roadmap. So, create your plans accordingly.  

Development and Releases 

A roadmap provides you with a look into the future of cryptocurrency. Development and releases tell about the performance of the past. It should have a good history of releases. 


Partnerships play an important role in assigning value when it comes to cryptocurrencies. So, learn more about partnerships before making any investments. 


Supply and demand determine the price and value of cryptocurrencies. The demand for bitcoin is high and so is the price.


A whitepaper is an important, technical document that details everything about the project. 


It is important to read what people are saying about cryptocurrency. While you will make the final decision, each review is an opinion about the cryptocurrency. 

Age and Price 

Many cryptocurrencies fail. You might have read about cryptocurrencies that did not even reach soft caps. Therefore, don’t just see the price history, also see the age of the coin.      


If there are not too many traders interested in that cryptocurrency then there might be a liquidity issue.

Market Cap

To learn about the potential growth of a cryptocurrency, you need to take the market cap into account.


Learn about laws and regulations. Avoid a project that does not comply with regulations.

You are going to invest your hard-earned money in a cryptocurrency. The purpose of any investment is to make profit. So, it is important to learn about the future value of the asset.