[Guest post by @CryptoBulld0g ]
There are many ways to make money in Cryptocurrency markets. Some use traditional technical analysis and read charts all day and some people like me try to find fundamentally strong projects when they are still not popular yet and accumulate before everyone else.
On these lessons I am going to try to explain some basic stuff about fundamental analysis. It is not hard but it takes time. It is mostly research and reading between the lines. Nothing else. Once you master it, it will become a lot easier for you to understand if the project will be here for the long term or not.
The number of new investors is increasing massively day by day. Most of them are attracted by the constant news they hear about Bitcoin. After a while, most of them will start to do what almost all of us did. “Ok. Bitcoin is fine, but what else is out there?”
“Can I find something else, some other project that can 100x my money in a short time? Can I find the next Bitcoin?” They will do that because of the success stories they hear about people: “I bought $1000 worth of Bitcoin back in 20XX and it is worth $$$$$$$$$ now.”
You have to understand that people love to brag about their success more than their failures. I bet there are tons of early adopters out there who tried to invest in other projects too, looking to make some more quick money.
Most likely they knew nothing about the dynamics and the fundamentals of those projects and right now their Bitcoin count is less than what it was 1-2 years ago (if they haven’t lost all of their initial investment).
At the time of this flood, on July 2018, there are 1649 projects on Coin Market Cap. There are tons of other projects which are not on Coin Market Cap yet because CMC is asking for $100K daily volume before listing.
We can easily say that 90% of these projects won’t be around in 5 years.Don’t get me wrong, some people will make a big fortune out of these projects,but more people will suffer from losses.Those projects are here to steal your precious investment if you are not smart enough
In my opinion – before investing in any project – Fundamental Analysis should be the first thing you do. It doesn’t matter if you are a “day trader” or a “hodler”. Without knowing the fundamentals you are just gambling.
With Fundamental Analysis, you can predict the long term value of a project more precisely than any other method. In these series of floods, I am going to explain the steps of a Fundamental Analysis, and how to find the best information.
In my opinion the most important aspect of a particular project is the “Use Case”. There are tons of similar projects out there that offer the same thing over and over without any innovation.
If it has a real world use case & aiming to solve a real problem,for me it is always 1 step ahead from others. When I select projects I want to analyze, this is the first thing I look at. I prioritize “Use Case” because I believe it has the most chance of predicting success
In my opinion there are 3 types of projects that have a higher chance to survive in the long run
- Privacy Coins
- Decentralized Exchanges
- Financial Services & Lending
The “target market” of these 3 areas are much larger than that of most others.
There are key features and figures you have to consider while doing your analysis/research. I divide them in 2 categories (Not all of them may be applicable to all projects):
When I do my research on a FA, I divide my analysis in 2 sections.
Take a look and let me know if you have any questions… pic.twitter.com/RjeOGgG7iC
— Bulldog – Recovering from Vacation (@CryptoBulld0g) January 26, 2018
Most of the time it is easier to do research on a high market cap project than the low cap one. They have larger communities behind them, and all of the questions you have to ask to analyze a coin are already asked several times.
You can see the examples on my Twitter. All the info I published about those projects over there was already available to me on different sources.
All my Fundamental Analyses under this post. RT if you like them! pic.twitter.com/F46YZ83Jb0
— Bulldog – Recovering from Vacation (@CryptoBulld0g) January 7, 2018
Low market caps need a deeper analysis. You have to spend more time if you want a complete analysis. You may need to contact the project founders/developers to get some answers.Potential gains might be higher with low caps, but don’t forget that they also have higher risk
I will start covering different parts of the Quantitative & Qualitative aspects of Fundamental Analysis in different floods. Please retweet to reach out more people. Stay tuned!
It goes without saying but:
This is not an investment advice. Do your own research and never trust anyone with your money. Especially a bulldog 🙂