How to Pro Fundamental Analysis

Discussed in this publication

  • Introduction to Blockchains and Cryptocurrencies
  • Decentralized Finance
  • Game Theory
  • Token Economics
  • Macro Economics
  • Basics of Investing
  • Sentimental Analysis
  • On-Chain Analysis
  • Audit Essentials
  • Others

Level → Beginner
Prerequisites → None

New to Cryptocurrency investing?
Have you been hit with everyone's favorite catchphrase “DYOR”?
Looking to top-up your Fundamental Analysis skills?

In this publication, I overview a couple of Fundamental analysis categories and topics to learn.

INTRODUCTION TO BLOCKCHAINS & CRYPTOCURRENCIES

To be able to perform fundamental analysis on cryptocurrencies, you’d have to understand the basics underlying technology and the essence of their existence.
The topics could include…

The Guardian Explains Bitcoin
  • Blockchains, Ledgers, and Digital Acyclic Graphs(DAGs).
  • Cryptography.
  • Consensus Algorithms.
  • Decentralization.
  • Minning.
  • Smart Contracts.
  • Cryptocurrencies.
  • Decentralized Digital Identities.
  • Interoperability.
  • Blockchain Applications (Supply chain, NFTs, Gaming e.t.c).
  • Limitations of Blockchains e.t.c.

GAME THEORY

Game theory is the study of strategies for decision-making. used by various market participants to craft a strategy.
In-Game theory, the theorist acknowledges the greater fool theory while trying to be the least foolish in the market.
Game theory for cryptocurrencies could span the following topics…

  • Understanding Ecosystem Narratives.
  • Rotations in The various crypto ecosystems.
  • Exploring Eventualities.
  • The Cycle of Market Emotions.
  • Zero and Positive Sum games e.t.c

TOKEN ECONOMICS

Token Economics a.k.a Tokenomics/Cryptoeconomics is an economy powered by cryptocurrencies playing the role of legal tenders in an organization or state.
In a Token Economy, Everything can be tokenized under certain agreements.
Popular topics include

  • Tokenomics of Value.
  • Intrinsic and Extrinsic Value.
  • Token Powered Ecosystems.
  • Token Economics Design.
  • Initial Offerings (IDO, ICO, IEO)e.t.c

MACROECONOMICS

Macroeconomics studies the underlying asset concerning the general economy intending to understand how the assets react to various factors in the general economy called the macroeconomic variables.
The study of macroeconomics gives an overall view of market behavior to certainties.
Macroeconomic variables include…

  • Inflation.
  • Unemployment.
  • Gross Domestic Product
  • Economic Cycles.
  • Income.
  • Expenditures.
  • Production e.t.c

INVESTING ESSENTIALS

Investing might not be as easy as it sounds especially with participation in the crypto markets, and maximizing profits is key.
Most investment courses have the following topics

  • Assets Classifications.
  • The Investment Processes.
  • Investment Strategies.
  • Portfolio Theory and management.
  • Risk Management e.t.c.

DECENTRALIZED FINANCE(DEFI)

Uniswap Homepage

Investopedia defines DEFI as “an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies”.
Defi services offer a wide range of services as in the regular banking system from lending and borrowing to currency exchange.
Interested in learning DEFI? These topics bridge between the centralized and decentralized finance worlds

  • Automated Market Makers(AMMs).
  • Decentralized Exchanges(DEXes).
  • Farming & Liquidity Providing.
  • Oracles.
  • Aggregators.
  • Launchpads.
  • Lending & Borrowing.
  • Bridges.
  • Game Finance e.t.c.

SENTIMENTAL ANALYSIS

Lunarcrush Homepage

Sentimental Analysis is done to draw a fine line between investors' speculations, emotions, market trends, and prices of assets.
On the lookout in this topic is…

  • The Fear Greed Index.
  • Google Trends.
  • Social Metrics.
  • Analysis of Social Media trends.
  • Influencer account watch.
  • Survey Statistics e.t.c.

ON-CHAIN ANALYSIS

glass node homepage

On-Chain Analysis is done by using tools that aggregate occurrences, transactions on various blockchains to reach a sentimental conclusion based on the derived data.
Using various metrics and ratios, Analysts can foresee events.
Some of these metrics and ratios include…

  • Holders Ratios and Distribution(e.g Long term vs Short term, RHODL(Realized Hodl)).
  • Blockchain value transfers.
  • New and Active Addresses.
  • Exchange flows.
  • NUPL(Net Unrealized Profit and Loss).
  • SOPR(Spent Output Profit Ratio).
  • NVT(Network Value to Transaction).
  • MVRV(Market Value to Realized Value).
  • Hash Ribbons.
  • Unspent/Spent Outputs.
  • Stock to flow ratio.
  • Staking data e.t.c.

AUDIT ESSENTIALS

Certik Homepage

An audit is a cyber security firm that ensures smart contracts code are secure from flash loans and hacks. Capital security is very important in investing and you want to be sure that you’re investing in something safe.
You could look into the following topics…

  • Security Score.
  • Reviewing Audit Documents e.t.c.

Others include;

  • Leverage Trading Essentials.
  • General Economics.
  • Technical Analysis e.t.c

In an upcoming article, I will list the tools for each of these categories…

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Disclaimer: This is educational content for Fundamental Analysis purposes and NOTHING in this publication should be considered Financial Advise.

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