Creating the fundamentals for crypto investments is determined through your expectations regarding your preferred coins and your expectations regarding the crypto names that are performing the best. In other words, the fundamentals that you will target will be based on your unique preferences. These preferences should remain consistent while you are evaluating Bitcoin. There are, however, a few fundamentals that you will need to at least shallowly consider since Bitcoin is decentralized crypto.
Regardless of your preferences, you will need to learn the ways in which Bitcoin’s adoption as a currency has grown and improved. Similarly, if this adoption has struggled to grow, you will need to know the reasons behind that struggle. In addition to that, there are some other fundamentals that you will at least need to take note of.
The Fundamentals of Bitcoin:
1) Transactions
Ever since Bitcoin’s price reached stunning heights during 2017, the coin’s transaction rates have failed to grow significantly. So far, this is not a problem because the current phase is still about drumming up interest and intrigue regarding cryptocurrencies. The greater the number of interested investors, the more funds the coin will be able to generate until it reaches a tipping point where there is a massive improvement in terms of the usage rate. So far, however, transactions are the largest black eye for the investors and offer fuel to the notion that the Bitcoin bubble will burst once people realize that there are a few investors who actually wish to spend this digital coin.
2) VIX co-relation
If you are searching for an index that will provide volatility predictions regarding Bitcoin so that you know when the best time to invest is, you might never find a clear answer. Compared to traditional investment vehicles like stocks and real estate, Bitcoin is still relatively new. Universities and other institutions are only just beginning to figure out the factors responsible for driving the currency’s price. Having said that, the Chicago Board Options Volatility Index (VIX) – also known as the Fear Index – is one that has displayed an early relationship with Bitcoin’s price.
The VIX is responsible for tracking market volatility – the higher the volatility, the higher the index goes. The index is called the Fear Index because the level of volatility reflects the level of concern within the Bitcoin market. Over the last three to four years, VIX has been quite similar to Bitcoin’s volatility as per the CBOE Global Markets (the institution responsible for developing the VIX).
As the VIX goes up, so does the price of Bitcoin. When the index goes down, there is at least some evidence that the Bitcoin price will follow suit. However, as we said, these are still early days in the analysis so it might be premature to assume certain causation or connection. However, early indications certainly point towards some sort of a relationship.
3) New uses
As we mentioned earlier, Bitcoin requires new transactions in order to enjoy gains in prices. However, an increase in transactions is only possible if there are more opportunities for a mainstream user to spend and purchase coins. With an increase in the number of companies accepting the currency, the coin can be protected from losses in value, thereby leading to price improvements.
Hence, we recommend setting up Google Alerts on your device, which will alert you whenever there is a change in Bitcoin use. All you need to do this is to visit Google.com/Alerts, and add something like ‘now accepts Bitcoin’ or ‘will be accepting Bitcoin’ in the search terms, so that you can get an alert every time a piece of content with these terms is published.
Final Word:
To sum up, the unique characteristics of Bitcoin mean that there are a few unique fundamentals that you definitely need to pay some attention to before starting your investment journey. If you are ready to begin this journey, please feel free to visit bitlq.net