Fundamental analysis is used to measure the real value of an asset by examining economic and financial factors. Fundamental analysis is considered one of the basics of investment and helps determine the value of different investment instruments. In general, fundamental analysis is related to monitoring the basic information of an asset. Fundamental analysts examine all factors that may affect the value of an asset, ranging from macroeconomic factors such as the state of the economy and sector conditions to microeconomic factors such as company management efficiency. The main purpose of fundamental analysis is to determine a new value that can be compared with the current value of an asset.

How Does Fundamental Analysis Work?

Fundamental analysis is typically used by investors with medium and long-term investment goals. It considers all factors that affect the value of assets that are not properly priced in the market. The working process of fundamental analysts includes:

• The general state of the economies
• The strength of specific industries
• The financial performances of companies issuing stocks.

What Is Fundamental Analysis for Cryptocurrencies?

Fundamental analysis for crypto assets involves a thorough examination of all available information regarding any given cryptocurrency. In cryptocurrencies, fundamental analysis covers topics such as hash rate, addresses, whitepaper, liquidity, and volume mechanisms. Fundamental analysis is required based on the belief that the potential of a cryptocurrency exceeds its past performance.

What Are the Key Factors to Consider in Cryptocurrency Fundamental Analysis?

In order to calculate the true value of a cryptocurrency with fundamental analysis, some key factors must be taken into account.

• The state of the utility and technology
• Market value
• Potential users and investors
• Developers
• Website, promotion, and history
• Roadmap
• Financial measurements and calculations
• On-chain metrics

The State of the Utility and Technology

In order to increase the probability of a project's success, its technology status and the desires and needs of users and the cryptocurrency ecosystem are taken into consideration.

Market Value

The market value is quite important as an indicator of the stability and growth potential of a cryptocurrency. The higher the market value, the more secure the investment's risk profile is considered as an indication of the stability and growth potential of a cryptocurrency.

Potential Users and Investors

Having high real potential for a cryptocurrency means that there is a solid potential user base. Potential users contribute value to the asset by adopting its use case and increasing its popularity.

Social media platforms such as Reddit, Telegram, Discord, and Twitter are considered good places to evaluate assets.

Developers

Evaluating developers plays a big role in making investment decisions. The reliability and experience of a cryptocurrency project is an important factor. Developers must have a strong potential. The state of the developers is a good indicator of how successful they can be against competing projects.

Website, Promotion and History

The website should provide clear information about the project and the people behind it. The benefits of cryptocurrency, expectations from the future, and the underlying technology should be clearly explained. For a project to have longevity, it is necessary for the project to have been in the market for a long time and to maintain its value.

Roadmap

A project should have a strong vision and a well-defined roadmap. Having a vision, mission, and roadmap is important for the project to be adopted and to compete with similar projects.

Financial Measurements and Calculations

Transaction volume helps to analyze an asset. The transaction volume of a cryptocurrency provides insight into whether there is something significant behind the rise or fall in value.

Liquidity is a measure of how easily an asset can be bought and sold, which is important for buying the asset at a good price.

Circulating supply and total supply provide information about the value of the asset.

On-Chain Metrics

On-chain metrics are criteria based on data provided by the blockchain. Information can be obtained from websites and APIs designed to inform investment decisions.

Temel Analizin Kaynakları Nelerdir?

Fundamental analysis relies on public financial data to determine the value of an investment. The data is recorded in tables or files as quarterly (10-Q) and annual (10-K) reports. Publicly traded companies or institutions use the 8-K to file when a reportable event occurs, such as a merger or top-level management change.

Fundamental analysis uses a company's or institution's revenues, earnings, return on equity, and other data to determine its fundamental value and measure its future growth potential.

What Are the Tools Used in Fundamental Analysis?

Fundamental analysts use a variety of tools, including:

• Financial statements
• Ratios derived from the statements
• Electronic spreadsheets
• Charts
• Graphs
• Market reports

What Is the Difference Between Technical Analysis and Fundamental Analysis?

Technical analysis is based on numerical indicators, such as price movements or changes in volume, on a chart of an asset. The data is examined historically and predictions are made about the future movements of the chart. In fundamental analysis, macro factors such as financial conditions and political factors are used.

Technical analysis is used by investors to make short-term decisions about their investments, while fundamental analysis is used by investors to make medium and long-term investments.

What Are Quantitative and Qualitative Fundamental Analysis?

The problem with defining the fundamental concept arises from the fact that it can cover everything related to a company's economic situation. It includes figures such as income and profit, but can also cover everything from market share to management quality.

Fundamental factors are divided into two categories:

• Quantitative
• Qualitative

Quantitative

These are information displayed using numbers, shapes, ratios or formulas.

Qualitative

It is the standard or nature of an asset.

Quantitative fundamentals are a company's measurable features and the main source of numerical data is financial statements. Income, profit, assets, and more can be accurately measured. Qualitative fundamentals are less concrete. It includes the quality of a company's management, the recognition of the project, and special technologies.