The Fundamentals of Cryptocurrency Analysis

The Fundamentals of Cryptocurrency Analysis

Featured image by Sergei Tokmakov via Pixabay

Millions of people have shown their trust in cryptocurrency, despite the highs and lows in that all-too-volatile market. Cryptocurrency investing has taken some people from rags to riches and hurled challenges toward the conventional economy. However, a multifaceted understanding of the nature of cryptocurrency is absolutely essential for anyone wishing to participate in the crypto markets. To that end, this article discusses the fundamentals of cryptocurrency analysis.


Despite the drawbacks, investing in cryptocurrency remains a great way to diversify your investment portfolio. Visit and learn more about diversifying your investments.

If you want to regularly invest in cryptocurrency, you need to feel good about your investment. Conducting a thorough analysis of cryptocurrency in general will help you with that. Here are some guidelines: 

1. Research the Team

Cryptocurrency is generally created not by an individual but by a team, and team members have the software they need to build the infrastructure.

Therefore, you could start your analysis by conducting thorough research on the professional experience of the teams that are running the cryptocurrency you have an interest in.

For example, review the LinkedIn profile of each individual on the team. The creators’ educational background can provide assurance on cryptocurrency’s development and the team’s intent.

2. Review White Papers as Part of Your Cryptocurrency Analysis

White papers are a discussion of the investors and their core mission and vision in a project. These kinds of projects are difficulty, but the companies attempt to provide an understanding of the technicalities that went into the cryptocurrency in these papers.

Therefore, while white papers are sometimes full of technical jargon, they are a great way to gain an understanding of the project’s vision. Without a clear vision, an individual or group cannot succeed.

Reading the project’s white paper will help you understand the different techniques the team used in the development of a particular cryptocurrency. A detailed understanding of the way the team developed the cryptocurrency can be an important aspect of your analysis.

A company’s white paper provides a roadmap for the cryptocurrency’s development and the technology behind it. Reading it will give you a better understanding about the digital currency you are considering investing in.

3. Get to Know the Cryptocurrency Community

Cryptocurrency is a community-driven technology. If you learn about the community, you can have an idea of whether the project will succeed or not. You can join a Discord community or a Telegram channel to find them.

Here you will learn more about cryptocurrency by observing people discuss the different elements internal to the project. The more you know about a project, the better you will be able to identify the community’s common goals and aspirations.

Also, try to read between the lines. For example, you might notice that engagement among a certain community seems unenthusiastic. This could be a warning sign that the future of that cryptocurrency is limited.

4. Learn About Cryptocurrency Technology During Your Analysis

It is basic to your analysis to understand that blockchain backs cryptocurrency. The blockchain is a distributed ledger where information about transactions are recorded. The blockchain records every transaction across a wide network of computers. The wide distribution keeps malicious elements from getting into the system. This makes the network safe and secure.


If you know about the nitty-gritty of the technical aspects, you will feel much better about your cryptocurrency investments. You might have heard that cryptocurrency is decentralized. This means that it follows the protocols or laws of no entity other than its own.

So far, governments have shied away from strictly regulating cryptocurrencies. Nonetheless, the day is likely coming when digital currencies will have to abide by a set of regulations.

5. Learn About the Company’s Vision

Every cryptocurrency began with a vision, and you can gain clarity about a company’s vision from their white papers. It follows that if you can read about a company’s vision for their cryptocurrency, you will know more about the workings of that cryptocurrency.

What Else Must an Investor Know About Cryptocurrency Analysis?

There are thousands of cryptocurrencies in the market. Therefore, cryptocurrency analysis is important for anyone who wants to trade or invest in that market. Thorough analysis provides you not only with safety and security but also gives you knowledge and insights for a safer investment.