With any style of trading Fundamental analysis is usually based upon the following; Latest news stories, social and economic events, world events, political and regulatory changes. Within Cryptocurrency Fundamental analysis also extends to the various published documents for any ALT coin, such as; Alt-Coin whitepaper, the coin slack group, blog, twitter, Reddit and other forum pages. With these additional abilities some fundamental analysis based investors can become closer to the asset they wish to trade upon more than ever before. As the market is still within very early stages and growing extremely quickly, staying on top of the emotionally based fundamentals is most important for any active trader to become successful.
Further fundamental research and analysis for any Alt-Coin is performed on the following questions and criteria;
- Purpose of the coin
- Does the Coin solve a real problem?
- Does the Coin possess a specific utility?
- Does the whitepaper provide a clear roadmap?
- Does the project include prominent and experienced investors?
- What is the consensus mechanism of the coin?
- Is the Coins governance structure centralised or decentralised?
- What is the timeline for the whitepaper roadmap?
- Is there “running proof” of the coin in action?
- How much has the project raised and how are they spending it?
In addition to the questions above and as each Alt-Coin has its own USP and aims, general market analysis from a fundamental perspective can be achieved via another set of simple questions and criteria;
- Is this the first coin solving this specific problem?
- Are there any competing coins? How different is the coin from its closest competitors?
- How lucrative is the target market?
- Are there any legal barriers to overcome?
- Who are the founding team members? Do they have any experience?
- Who are the listed advisors? Do they have any experience?
- Are lines of communication between investors, the market and the developers open and used?
- Are developments and any progress conveyed to the market in a professional manner?
- What is the supply structure to the Coin? How many Coins will be created?
- What is the market capitalisation of the Coin?
- Is there a “hard cap” on the Coin?
- What is the allocation of Coin to the Founders and will there be a lock-up period?
- How will the distribution of the Coin be completed? Will there be an even distribution?
- Are there any scam warnings for the Coin?
- Is the Coin part of a potential Ponzi-scheme or MLM scheme?