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A Guide to Fundamental Analysis in Crypto

Binance Research (JieXuan Chua, CFA)


  • Fundamental analysis refers to the method of assessing the intrinsic value of projects and tokens by analyzing various economic, financial, qualitative, and quantitative factors.

  • A non-exhaustive list of factors such as the demand and supply dynamics, financial performance, valuation, tokenomics, and stakeholder engagement form the basis of fundamental analysis.

  • In general, the more demand for a protocol’s service, the more valuable its tokens are, assuming all else is equal. Token holders are compensated by the value accrual of their tokens, which appreciate in value as more fees are paid by users of the protocol.

  • For a project to be truly self-sustaining, it needs to achieve profitability and generate real cash flow. This is where understanding a project’s financial performance comes into play.

  • Valuation helps investors get a sense of the intrinsic value of a project’s native token. This is important in ensuring that one does not overpay for a token.

  • Tokenomics refers to the study of the economic characteristics of a cryptographic token. The goal is to understand how various incentives affect the supply and demand of a token and, ultimately, its price.

  • We are of the view that stakeholder engagement is worth monitoring to understand the underlying demand and development of projects given that people are at the heart of successful projects.

  • To put theory into practice, we have analyzed some of the top dApps based on several metrics, and shared examples of how the business models of different projects work.

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About Binance Research: Binance Research is the research arm of Binance, the world's leading cryptocurrency exchange. The team is committed to delivering objective, independent, and comprehensive analysis and aims to be the thought leader in the crypto space. Our analysts publish insightful thought pieces regularly on topics related but not limited to, the crypto ecosystem, blockchain technologies, and the latest market themes.

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