The material presented here reflects the author’s viewpoints and investigation, and should not be considered financial guidance. The details provided are broad in scope and might not cater to the particular requirements of any individual or organization. This content should not be used as a basis for making professional or financial decisions.
How to find the Best Crypto project using fundamental analysis. If you are a beginner or non-technical person and don’t know how to do cryptocurrency fundamental analysis without technical knowledge, then this is for you. It will also give you ideas about which crypto project is best to buy for the long term and short term. You can analyze a crypto project’s future in 12 easy steps.
Table of Contents
- What is Cryptocurrency Fundamental Analysis?
- How to do Fundamental Analysis On Crypto project
- 1. Check the Basics
- 2. Check Scam or Legit
- 3. Check Real World Utility – Whitepaper
- 4. Check Technology
- 5. Check the Team
- 6. Check the Roadmap
- 7. Check Advisors and Investors
- 8. Check Social Media
- 9. Check Tokenomics
- 10. Check Liquidity
- 11. Check Price
- 12. Check Competitors
- Best Research Tools & Websites for Cryptocurrency fundamental analysis
- Conclusion
What is Cryptocurrency Fundamental Analysis?
Fundamental analysis of cryptocurrencies is a way to measure the quality of a crypto project by looking at different aspects. This includes details of the information available for financial assets. For example, you can see the use case, the number of people using it, or the team of the project. The purpose is to determine if a project is undervalued or overvalued.
How to do Fundamental Analysis On Crypto project
Top 12 Cryptocurrency Fundamental Analysis Checklist for Beginners.
1. Check the Basics
The first thing you should check is a project listed on coinmarketcap.com and coingecko.com. Then Check the Market cap of that project. Also check the rank, price, and details, and check how many legit crypto exchanges listed this project.
Check which crypto sector the project is working on. What they are trying to solve, and has any other project done it before? If yes, then check the returns of their coin given to the investors. And what’s new in this project? This will give you a basic idea of a particular project.
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2. Check Scam or Legit
To check the legitimacy of any crypto project, first, visit their site and check whether the site looks professional or not. Are they provided all the information related to the project? Are they providing their team members information?. Are they providing Whitepaper?
If all the criteria are positive, then first you should check the core team members (the founder’s and developer’s) accounts. Check their profile on LinkedIn or Twitter to see their years of experience in the industry. Also important, are they active on LinkedIn or Twitter? Are they posting things related to the crypto industry? If yes, we will go to the next steps of the Fundamental Analysis which is reading their whitepaper.
3. Check Real World Utility – Whitepaper
Once you are convinced after checking the legitimacy and the basic information of the project. The next step is to test your project’s use cases. For checking the real-world utility or use case of any project, the best practice is to read their whitepaper. Reading a whitepaper is boring for some people, even me. But believe me, this is an important way to learn the basics of any project.
Check what they are trying to solve and is it a real-world problem? If you can’t find any clear real-world utility in the project, it’s a red flag. The best projects are those whose real-world use cases are easy to understand even if you are not a technical person. Let this project go to hell don’t invest if you can’t find use cases. Look for others.
Now it’s time to next step of cryptocurrency fundamental analysis
4. Check Technology
Many of us do not have technical knowledge, but it is important to assess the suitability of the project’s technology. As you read the white paper, try to think, is a technology innovative and disruptive. Will they do something different from their competition? Is this technology relevant to the future? Then find out what problems you’ve encountered, such as hacks, and past exploits, and how to deal with them. All information is on Google and you only have to search once.
5. Check the Team
In the early stages, the team is the most important factor for the project’s success. First, check if your team is exposed. This means that the team’s name and role are publicly available. Many projects have anonymous teams, but exposing them reduces the risk of fraud. Then take a look at the team to understand its background and qualifications and use forums such as LinkedIn to see if they are who they say they are, what college they attended, and what they have built in the past. This is a very important checklist of cryptocurrency fundamental analysis. you should never miss this point.
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6. Check the Roadmap
A Roadmap should help you understand what your project is trying to achieve and evaluate how realistic it is. Because crypto projects are very complex, delays are frequent. Monthly delays are not uncommon. But if development consistently misses milestones, that’s a bad sign. Investing in a project in its early stages can take a long time to see results and requires a lot of patience and confidence, as price movements usually revolve around important milestones. Therefore, it is important to fully understand the roadmap.
Also, check- Why Cardano’s Stablecoin Djed Better than Terra UST
7. Check Advisors and Investors
The Next Check is, to take a look at the major investors, advisors, and influencers involved in the project. If you have a lot of famous and famous names, it’s usually a good sign of the legitimacy of your project. And that means the team is focused on marketing. However, if too many people are influential in the project, it also means that the token is very unstable, regardless of the quality of the token, because pumps and dumps occur on a regular basis. Moreover, it’s a red flag when you see the team focus on marketing rather than product updates.
Important Tips – Messari and Lunarcrush are excellent sources for understanding investors and influential information. However, it is important to understand how much investors and consultants are involved in the project. this is a useful fundamental analysis checklist. You can determine this by regularly tweeting to see if they are talking about the project.
8. Check Social Media
This is one of the most important steps to date. Search for projects on Twitter to see how powerful the community is, what discussions are taking place, how friendly they are, and whether there are significant influential people who support the project. Make sure this helps to measure the mood of the project. The actual community of the project is usually on telegram and Discords and joins the server to assess whether people believe in the project and whether the team is responsive to the community. If a team interacts with people on a regular basis, it reflects the legitimacy of the team.
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9. Check Tokenomics
The key points of Fundamental Analysis to check are the token distribution schedule, aggregate and circulating supply, and whether the supply is inflation or deflation. Check how the token was released, if there was a pre-sale, and if there was a response.
When major players buy tokens, it is usually important to understand the lock-in period specified in the project. You also need to understand the token vesting schedule and when additional supplies will be unlocked. This usually has a big impact on the price. Understand whether holders of similar staking, revenue sharing, or fee payment plans are given incentives, provide clues to the potential long-term pricing of tokens, and give holders passive income. Provide. Increase the possibilities of design.
Next, understand what the tokens are used for in the project ecosystem. Understand whether it is a trading currency or a governance token. The project has very good use cases, but it’s often a bad investment because the associated coins and tokens aren’t actually used.
Important Tip – Basically, I first check if the project focuses on tokenomics rather than building technology. If so, it’s a red rag for me.
10. Check Liquidity
Liquidity is an important factor in assessing quality. In general, the more places the token is listed, the more legitimate the token is. In particular, keep in mind that large exchanges usually have many conditions that must be met before listing coins. This information can be found in the Markets section of Coinmarketcap.com. Familiarity with liquidity can help as part of fundamental analysis.
Important Tip: Most coins with a 50x chance are not usually found on major exchanges, but if you want to be secure, the risk is significantly lower, so the coins listed on the exchange are recommended.
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11. Check Price
Evaluate the performance of last year’s 90-60-30 days. It evaluates how coins normally move, whether they are the best ever and are rising, frequently pumped, or organic. Check if it is a typical move. Is it low enough to provide a significant upside?
Important Tip: As a general rule, pumping coins, regardless of their quality, are likely to be knocked off violently, so never chase them. Looking at many influencers, especially on Twitter, means they’re pushing prices out of the way.
12. Check Competitors
Now that we have a lot of information about the project, we will evaluate the competition, the number of players in this field, the success of different projects, and the pros and cons of different projects. This will give you a good idea of the relevance of your project.
These are the cryptocurrency fundamental analysis checklist for Beginners.
Also Must Read: How to Build a Crypto Portfolio that will Make Profit [2023]
Best Research Tools & Websites for Cryptocurrency fundamental analysis
Here are some best tools and websites that you can use to analyze a crypto project’s fundamentals and legitimacy.
1. Messari.io
If you are looking for a hidden gem and the next big crypto project, this is a place for you. This is because the Messari screener is the best place (or at least the best place you’ve ever found) to filter your search when you’re hunting. You can filter by market capitalization, volume, liquid supply, active addresses, development activity, on-chain indicators such as Reddit subscribers, and more. In addition, Messari offers useful and very good research articles. if you are doing fundamental analysis it’s a great place for you.
I know checking so many cryptos can be very difficult as 90% of them are not of real value. However, it’s a good idea to let someone do this so they know who to watch out for and which to ignore. We can do this in Messari as a community-created screener. There are various categories here, from specific types of projects to portfolios owned by asset managers. I often want to know how much money they invested and see if I can find a suitable project to hold. These screeners include funding from the fairly popular names Coinbase and Alameda Research. If you’re looking at a Metaverse or a game project, there’s another screener for that.
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2. LanarCrush
The most trusted social media provider in the cryptocurrency market is LunarCrush. LunarCrush uses artificial intelligence, machine learning, and a combination of all these great features to organize and understand all the information for various crypto projects. This includes collecting data such as social activity, Twitter activity, Reddit activity, link popularity, news activity, and Google search volume. They aggregate all the information to provide a high level of social media sentiment for various cryptocurrency projects.
3. Nansen.ai
Nansen is a blockchain analytics provider. where the big money is moving? You can see and track on Nansen. Investors usually use it to find opportunities in the market. Nansen tracks million of crypto wallets. You can also set real-time alerts on the dashboard. This is a great website if you are doing crypto fundamentals analysis.
4. Glassnode
Glassnode.com is an on-chain analysis tool. which is helpful in doing Fundamental Analysis. When the market is down and you need to see the big picture to regain confidence. Seeing an increase in the number of active wallet addresses helps you to sleep at night all the time. But that’s not all. Glassnode provides a variety of metrics and supports many cryptos, including the well-known Bitcoin, Ethereum, Binance Coin, and many DeFi and ERC-20 tokens.
The problem is that it doesn’t help if you don’t know what you’re looking for or how to interpret metrics and charts. So I would like to introduce you to Glassnode’s weekly on-chain analysis. You can read it yourself or watch it on YouTube. I highly recommend it. Looking at these, I understood the benefits of on-chain analysis, which helped me do this analysis myself. You can also see where you are in the market cycle. This is often useful when managing a portfolio. Another place to learn about on-chain analysis is the Glassnode Academy.
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5. CoinMarketCal
CoinMarketCal is a cryptocurrency calendar that informs you about all upcoming events related to various crypto coins. The platform uses a community-driven framework that allows users to add crypto events. Real events will get more positive scores and fake events will get many negative scores. For example, if you are interested in a particular event that could affect a particular crypto price, just search for coins on the platform. With just a few clicks, you can see a list of all the events for the selected time.
Conclusion
Congratulations on completing our Masterclass on Cryptocurrency Fundamental Analysis! You now have the skills and knowledge to properly analyze the legitimacy and fundamentals of any crypto project before investing. Remember, it’s important to always perform a fundamental analysis before committing any funds to a cryptocurrency. Keep these techniques in mind and make informed investment decisions.
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Must Read: 15 Easy Ways to Make Money with Cryptocurrency [2023]
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