Fundamental analysis is an analysis that aims to understand an asset by considering several aspects, such as the basis for which the crypto asset is used, the number of people who use it and also the team behind the creation of the asset. Performing fundamental analysis is useful for determining whether the price of an asset is overvalued or undervalued, and it is also necessary to know that the future potential of an asset is not only assessed from the performance of the asset in the previous period. But also by taking into account microeconomic and macroeconomic conditions. If you want to know more about how to do fundamental analysis, here is an example of what you can do before considering buying bitcoin. Example: Bitcoin has a finite supply of only 21 million coins that can be mined. Meanwhile, currently the number of bitcoins in circulation has reached around 18.7 million, so the number of bitcoins that can be mined is decreasing. As we know, the less an item is, the more expensive it will be. In addition, Bitcoin’s blockchain technology makes it a permissionless asset, or does not require an intermediary (such as a bank or other institution) to use it. This asset is censorship resistant or no one can prohibit its use. This makes more and more people adopt it, both from retail investors to large institutions including the government.
The aspects mentioned above are part of the fundamental analysis that you can consider before deciding to buy bitcoin. Taking into account the limited number of coins that can be mined, and Bitcoin technology is part of the fundamental analysis you can consider before deciding whether bitcoin is worth enough for you to buy as an asset. In addition to the example above, understanding the reasons behind the high price of a meme coin like Dogecoin, for example, by finding out how many users it has, how many people talk about it on social media or on Google, is also included in fundamental analysis. So, make sure you pay attention to the aspects mentioned above as a first step before deciding to buy a crypto asset.