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What is Fundamental Analysis?

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With over 25,000 cryptocurrencies currently available to trade, it can be overwhelming, to say the least. You might be familiar with some of these questions that run through your head:

  • Is that coin a scam?
  • What’s the difference between this coin and any other?

Proper research can provide clarity to these concerns.

Important to Remember

Investing begins with education, not buying. Invest your time in understanding a project before you invest your money.

Cryptocurrency fundamental analysis can help to try determine the value of a digital asset based on foundational factors, helping indicate if it’s overvalued, undervalued, or aptly priced.

It’s important to understand that assessing cryptocurrencies differs from assessing traditional companies or stocks.

While conducting a fundamental analysis assessment is helpful in attempting  to gain insight into the value of an asset, it can get complicated. It is important to make a fact-based analysis. There are some risks when conducting fundamental analysis, including incorrectly published data or if something is misinterpreted or based on false assumptions.

We’ll soon explore tools and checklists to assist you in evaluating a coin’s value. Instead of succumbing to FOMO (fear of missing out), take a pause to research.

Why does it matter?

Many people choose to skip the learning phase of investing and instead choose to follow the crowd and hope for the best.

Crypto trends often spread rapidly. By the time you hear of an opportunity, it might be late or just a passing fad. So how do you catch opportunities early before the masses get in?

Enter fundamental analysis.

The importance of having a process

Having a well-defined process for fundamental analysis is essential for crypto investments due to the unique characteristics and complexities of the market.

We offer a downloadable checklist that outlines some of the factors that you could consider when performing fundamental analysis. Please note that this does not cover all aspects to be considered to perform a fundamental analysis.

Download our fundamental analysis checklist

If you can successfully go through a fact-based process and are satisfied with your research results then based on your research and investment strategy, this could potentially indicate an ideal cryptocurrency to invest in or to at least keep on your radar.

Why does having a fundamental analysis process matter? It could help:

  • Avoid impulsive trading.
  • Identify opportunities early.
  • Identify effective strategies.
  • Boost confidence in decision-making.
  • Detect red flags in the project.
  • Build accountability.
  • Reduce position-related stress.

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Disclaimer: The information on Swyftx Learn is for general educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any assets. It has been prepared without regard to any particular investment objectives or financial situation and does not purport to cover any legal or regulatory requirements. Customers are encouraged to do their own independent research and seek professional advice. Swyftx makes no representation and assumes no liability as to the accuracy or completeness of the content. Any references to past performance are not, and should not be taken as a reliable indicator of future results. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose. Consider our Terms of Use and Risk Disclosure Statement for more details.