The recent growth of the cryptocurrency market and the succession of good news are encouraging. At least, many experts say that the “bottom” of Bitcoin is passed, and there is a strong fundamental component. Is it so? Let’s figure it out! To begin with, we will consider what the “foundation of the market” is about which they talk so much, or what the fundamental analysis is.
And so this analysis is the selection of news and economic factors that can greatly affect the course of trading. If the technical analysis determines the trend and the entry point for the transaction, then in the case of fundamental analysis we see the overall situation. For example, statements by regulators, forks, an introduction of new protocols of network consensus, scaling of popular blockchains. Also, the main rule of such an analysis is the assertion that causes first – consequences later.
Investors are actually not very risky market participants, unlike speculators. With a good news background, they will always buy large volumes. As for speculators, the market is too “heavy” for them, in order to greatly raise or bring it down, they tritely do not have enough money. Therefore, it is very important for large market participants (investors) to understand what kind of ground or basis there is to buy a crypto asset for the medium term – up to a year, for instance.
That is, strictly speaking, why we need a foundation for investment decisions. This topic not only applies to popular coins but also to other financial instruments – for example, securities, currency pairs, bank metals. And now we will consider some good signals from the point of view of the fundamental analysis in the cryptocurrency market.
SBI Holdings and Ripple
As cryptocurrency spreads, the banking system intends to work more and more with blockchain startups. Ripple was among them. It is known that this distributed registry network is very flexible in relation to banks, and significantly reduces the cost of international transfers. In addition, it is no secret what the speed of the transaction in the Ripple network is – it is processed within minutes. Therefore, the Japanese financial giant SBI (one out of many) seriously looked into such solutions. The fact is that the bank is already working with Ripple and has withdrawn many benefits. According to representatives of the bank, they are going to continue to maintain the network and contribute to its further development. Of course, such a message already creates confidence in the investment attractiveness not only of the bank but also of XRP coins. Note that SBI Holdings in 2018 announced the Visa bitcoin card.
Governments are studying blockchain for its further introduction
One of the clearest examples is the government of Germany. For several years, there has been an active dialogue with blockchain developers on the introduction of technology in many areas. At the same time, a legislative framework is being developed to protect investors. Meanwhile, the well-known Chinese University of Fudan is launching its distributed registry technology center. The UK has followed pretty much the same path. Last year, a center for the study of popular technology was opened in Scotland. Note that this is the very first such establishment in Europe.
As we see, there is already a need not only for implementation but also for studying the potential of the blockchain. The fact is that the development of economic sectors does not stand still. To speed up processes and create reliable data storage, there is a need for innovative solutions. That is why blockchain gains more and more attention not only among government members but also scientists.
Investors see more good news
And, finally, we could hear more than once at the beginning of this year that despite the speculative decline in the cryptocurrency market, it is promising for investment. Forbes made a loud statement that Bitcoin serves as a good payment method. While some Central Banks still see him as a threat. As for the legislative mail, the Canadian regulator has legalized mining to protect the rights of investors. Luxemburg, for example, went even further – its parliament approved a bill that regulates the use of Blockchain.
As we can see, the fundamental component of cryptocurrency is increasing every quarter. Consequently, the growth of popular coins this year is inevitable.