A Guide to Fundamental Analysis for Cryptocurrencies

This article examines the importance for cryptocurrencies fundamental analysis of how to conduct and how to engage in your own due diligence before investing.

Navigating the world of cryptographic features can be very daunting, as there is so much use of computing jargon and technical concepts that almost certainly confuse you. On top of that, the relative childhood of the technique, it can be difficult to find structured resources that will help you in your journey.

Here at Master The Crypto, we took the liberty to create a comprehensive free guide to invest in cryptocurrencies!

The importance of doing your own analysis

For traditional investments such as equities, fundamental analysis, the financial health and viability of a company after graduation brings the valuation. If the numbers look good, we can be sure that the company has good fundamentals and we can, therefore, invest in them. Performing fundamental analysis for cryptocurrencies, however, is radically different as there is no degree. Why? because:

1. Cryptocurrencies are not companies, but representations of value or assets within a network. Its viability is not based on generating a revenue, but depends directly on community involvement (users, miners and developers). Each cryptocurrency is a manifestation of the various applications of blockchain technology, and usually decentralized;

2. The crypto-space is in its infancy stages, and almost all of the cryptocurrencies are in stages of development. Which means that only a limited number of cases in the real world are currently used and therefore, to have a lack of track record.

So, fundamental analysis on cryptographic functions must be done with another method. Considering the complexity of the cryptographic functions and the underlying technology, it is even more important for us to engage in research to assess the viability and potential of the coins. This ensures that we make better investment decisions and are kept in the loop of things. But more importantly, a good understanding of a coin's fundamentals allows you to form your own opinion and your own stand, which is rare in the crypto-world because of its complexity. ( See also: Investing Dangers in Cryptocurrency )

however, do not worry if it all seems too complicated! We have created a comprehensive and easy-to-understand guide to help you. Let's start!

Step 1: Finding the Right Sources of Information
Knowledge is power. To judge a coin, we must first know where the most important sources of information are obtained. Here's where you should get the information out

1st coin white paper

A detailed proposal by the development team outlining the purpose and mechanics of the coin. This constitutes the main source, the basics of the coin of the evaluation. You should always read the coin white paper before investing. The downside is that it can give the use of technical jargon and concepts given very technical, which Joe for an average hard to grasp. (See also: Crypto ICO vs. On IPO: What's the difference?)

2nd coin slack channel or blog

This provides the official and main communication channel of the core development team. Join her limp channel and see the development team's interaction with the community. Ask questions to get more information about the coin. You should also follow the updates from the developers in their official blog.

1. Community Forums: Reddit / Bitcointalk / systems

Forums are a great way to better understand the coins, as well as the sensations surrounding the coin. You can find simple definitions of specific terms or easy-to-understand analysis of coins from forums as the community is well informed. The variety of thoughts allows you to grasp the mechanics of the coin far better, especially if you are not technically inclined. If you are unfamiliar with the technical jargon, a good tip is sought for your request along with the term "ELI5" which stands for "explain it to me as I am 5 years old".

Step 2: Cryptocurrency Fundamental Analysis Checklist

The next step involves asking questions about the coin systematically to determine if it is a good investment. For your comfort, we have created a comprehensive checklist just for that.

Get my free Fundamental Analysis Checklist here

For you to access our free and comprehensive Fundamental Analysis checklist, all you need to do is to provide your email here and you will also be investing on your way to the right cryptocurrencies!