Basic Cryptocurrency Analysis

BASIC CRYPTOCURRENCY ANALYSIS
Before diving into the subject matter of this book, it is best

to cover alternate forms of basic analysis for the large
percentage of readers new to the whole cryptocurrency
trading. In order to let advanced readers selectively choose
what or what not to read, I’ll insert an overview of the
section below.
Teams
Whitepapers
Events
Competition
The Big-Brother Technique
Utility
Sentiment Analysis
Market Cap
Activity
Volatility
Supply Mechanisms
TEAMS
Every coin or token has a team behind it that aims to
provide a service, solve a problem, or in some other way
provide utility and value. It is often worth your time to do
some due diligence on the team behind your investments if
you’re looking to invest and hold for the long term. This
applies to a much lesser degree if a trade is meant to be
executed in a short period. However, even then, it is worth
it more often than not to dig into the behind-the-scenes
since doing so allows for a greater understanding of an
overall situation and provides important context to all
investment decisions. Take Storj, for example. This project
aims to create decentralized cloud storage. The team
consists of nearly 80 reputable experts from varying
backgrounds, and the CEO, Ben Golub, is a professor at
Northwestern University and once taught at Harvard. In
the past 30 days, as of this writing, STORJ has pumped
from $0.63 to $3.27, a 400% gain. Additionally, major
companies such as Google have put money in the team and
the project. While none of this guarantees success, a solid
foundation does massively increase the chances of long-
term innovation and success. Some cryptos aren’t run by a
stand-alone group of developers, but rather by
organizations. Cardano, an example of such, is run by three
companies: IOHK, Emergo, and the Cardano Foundation,
which, in turn, are managed by reputable industry leaders.
ADA is up by nearly 4,000% in the past year as of this
writing.
Projects with people and organizations like ADA and
STORJ, as well as many others, are the real gold mines of
the crypto space. The projects that survive in the long run
and continue to build utility and create value are the
projects that are likely to deliver massive and sustained
growth. To research the team behind a project you’re
interested in, just do some Google searches and check out
the project’s website. Make sure to consult information
from multiple and unbiased sources.
WHITE PAPERS
A white paper is an informational report issued by an
organization about a given product, service, or general
idea. White papers explain (really, sell) the concept and
provide an idea and timetable of future events. Generally,
this help readers understand a problem, (tradingview.com)
Figure out how the creators of the paper aim to solve that
problem, and finally form an opinion about that project..
Three types of white papers frequent the business space:
the “backgrounder,” which explains the background behind
a product, service, or idea and provides technical,
education-focused information that sells the reader. A
second type of white paper is a “numbered list” that
displays content in digestible, number-oriented format. For
example, “10 use cases for coin CM'' or “10 reasons token
HL will dominate the market.” A final type is a
problem/solution white paper, which defines the problem
that the product, service, or idea aims to solve. All three
types of common and should be noted while looking into
the white paper of your favorite crypto project to
understand context. White papers are used within the
crypto space to explain novel concepts (or perhaps not-
novel concepts) and the technicalities, vision, and plans
surrounding a given project. All professional crypto
projects will have a white paper, typically found on their
website. A project raising money through an ICO (initial
coin offering) all but requires a white paper. Reading the
white paper will give you a better understanding of the
project than practically any other single source of
accessible information. Below are a few websites that store
such crypto white papers.
All Crypto White Papers -
https://www.allcryptowhitepapers.com/
Crypto Rating
https://cryptorating.eu/whitepapers/
CoinDesk
https://www.coindesk.com/tag/white-papers
EVENTS
A great way to analyze the potential of a coin or token,
whether in the short term, midterm, or long term, is
through an understanding of upcoming events. A few
popular crypto event calendars are below.
CoinMarketCal - https://coinmarketcal.com/en/
CoinEvents - https://www.coinevents.co/
CoinCalendar - https://coinscalendar.com/
With these websites, all upcoming launches, partnerships,

airdrops, forks/swaps, or any other notable event can be
viewed for most cryptocurrencies. The simple number of
upcoming coin events, not to mention the quality, can tell
you a lot about a project. Then, reading into each event can
provide a step forward in terms of really understanding
how a project will evolve over time. Often, coins will pump
10%, 20%, or beyond on the day of an event. However,
keep in mind that crypto is not a fully efficient market
(remember the EMH), so while events upcoming in the
extreme short-term are often priced into the value of the
coin or token, the same may not be said about events a few
weeks or months out. Therefore, if you do buy based on
events, it is a much better bet to do so on upcoming events
happening at least a few weeks out of the current date.
Even then, risk is involved because if enough traders buy
early enough, with the intent of dumping the day of an
event after an assumed pump, the price can instead crash
even if the event is good news. So, weigh all of these event-
related factors while considering how or whether to invest
in a coin or token and, regardless, make sure to keep
informed on events happening across the market and
within the realm of the assets you hold.
COMPETITION
As within all aspects of business, competition is a must for
understanding a company’s relative situation in a given
market. Within the highly volatile crypto market, this
applies to an even greater degree. However, within niches
of the crypto market, such as web 3.0, decentralized
storage, etc., there’s plenty of space for multiple
companies. This falls back to the Big-Brother concept,
which dictates that projects offering a small twist off of
another larger project, can perform exceedingly well,
despite established competition.
THE BIG-BROTHER TECHNIQUE

The Big-Brother technique, a creation of the popular crypto
influencer Ivan On Tech (links to his channel are available
in the resource section), is an important and extremely
easy concept within the sphere of competition and dictates
how and why some cryptos can blow up. The technique
relies on trends; within such trends (such as DeFi, FinTech,
gaming coins), projects that often go parabolic are the ones
that have a similar, brother-like project and differ through
some positive alteration. This works because investors
aren’t as likely to embrace a new technology or idea as a
new project that differs from an already popular coin in
only small ways. For example, Ethereum, (ETH), when it
first came out was just like Bitcoin (BTC), except ETH
utilized smart contracts. Then, Cardano was like Ethereum,
except Cardano utilized a modified proof-of-stake algorithm
to make its network more scalable. Recently, the exchange
Uniswap (UNI) served as the big brother to the exchange
PancakeSwap (CAKE), which offers much lower fees. In all
these cases, traders were familiar with the general
concepts and ideas behind the projects and the new
projects that were generally the same but had a few key
alterations.
UTILITY
Utility within a coin or token is one of the most important
aspects of due diligence since understanding the current
and long-term utility and value behind a coin or token
allows for a much clearer analysis of potential. Utility is
defined as being useful and functional. Crypto coins or
tokens with utility have real, practical uses: they don’t just
exist but rather serve to solve a problem or offer a service.
Coins with the most functional current uses and use cases
are likely to succeed as opposed to those without continued
purpose, use, and innovation. Here are a few case studies:
Bitcoin (BTC) serves as a reliable and long-term
store of value, akin to “digital gold.”
Ether (ETH) allows dApp and Smart Contracts to
be created on top of the Ethereum blockchain.
Storj (STORJ) can be used to store data in the
cloud in a decentralized manner, similar to Google
Drive and Dropbox.
IOTA (IOTA) offers completely free transactions to
be used for small, daily payments.
Basic Attention Token (BAT) is used within the
Brave browser to earn rewards and send tips to
creators.
Golem (GNT) is a kind of global supercomputer
that offers rentable computing resources in
exchange for GNT tokens.
All of these coins or tokens have real, practical utility.
Projects that have utility and work on constantly improving

Basic Cryptocurrency Analysis

Uploaded by

Copyright:

Available Formats

Basic Cryptocurrency Analysis

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Basic Cryptocurrency Analysis

Uploaded by

Copyright:

Available Formats

BASIC CRYPTOCURRENCY ANALYSIS

Before diving into the subject matter of this book, it is best

With these websites, all upcoming launches, partnerships,

THE BIG-BROTHER TECHNIQUE

You might also like