Apr 7, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly highlight — Fed not ready to adjust rates 

Federal Reserve Chair Jerome Powell emphasized that the central bank will not rush to respond to the Trump administration's tariffs or the resulting market turmoil stemming from fears of a global economic downturn. At a conference in Virginia, he acknowledged that tariffs could significantly impact the US economy, leading to slower growth and higher inflation. However, he stated that the Fed will wait for more clarity before considering interest rate cuts.

With inflation still elevated, Powell stressed the Fed's responsibility to prevent a temporary price surge from evolving into a persistent inflation issue. Julia Coronado, President and Founder of MacroPolicy Perspectives, noted that due to current inflation levels, the Fed is not as well positioned to offer economic support as during previous trade disputes.. Even if rate cuts become necessary, they’re likely to be delayed and cautious.

Following Trump’s announcement of new tariffs, stocks fell sharply, with the S&P 500 facing its worst week since the COVID-19 lockdowns. Economists have raised concerns that these tariffs could lead to a recession, prompting increased speculation about the timing of potential rate cuts. Powell's recent comments marked a shift from his earlier stance that inflation effects from tariffs would be short-lived.

He reiterated the Fed's commitment to maintaining stable long-term inflation expectations and acknowledged the uncertainty surrounding the tariffs' economic impact. Despite signs of deteriorating consumer sentiment and business spending, Powell argued that definitive data has yet to emerge.

As the Fed prepares for its next meeting, futures markets have adjusted expectations regarding rate cuts. Powell's remarks suggest that a preemptive rate cut is unlikely before assessing the broader economic implications of the recent tariffs.

Weekly crypto highlight — Bitcoin’s resilience amid tariffs’ induced volatility

On Apr 2, 2025, Donald Trump announced aggressive U.S. tariffs: a universal 10% on all imports, with specific rates of 34% on China, 24% on Japan and 20% on the European Union (EU), while notably exempting Russia. This policy shift triggered significant volatility in both traditional and cryptocurrency markets. The announcement’s timing, just after US stock markets closed, appeared strategically timed to limit immediate reaction.

The next day, the S&P 500 fell over 5.1% and the Nasdaq Composite dropped more than 5.6%, reflecting investor fears of economic disruption and rising inflation. This was the fifth-worst trading day of the 2020s, reminiscent of Black Thursday in March 2020. In contrast, Bitcoin showed resilience, trading at around $81.7K, only a 6% decline from its recent low, indicating that investors may see cryptocurrencies as hedges against geopolitical uncertainties.

Trump framed the tariffs as the start of a "Liberation Day," introducing a two-tier system: the universal tariff effective April 5, with reciprocal tariffs on about 60 countries starting April 9. This approach aims to counteract existing tariffs on U.S. goods, compelling nations and regions like China, Japan and the EU to reconsider their trade policies.

Asian countries face severe impacts, with tariffs as high as 49% on Cambodia and 48% on Laos. Supporters view these tariffs as negotiation tactics, challenging nations to accept favorable trade terms or incur higher export costs. Trump argues this will lead to fairer trade conditions, while critics warn of potential retaliatory tariffs, increased costs for American consumers and broader economic uncertainty.

The success of this policy depends upon whether nations opt for cooperation over confrontation. Proponents believe nations will negotiate to avoid losing access to the lucrative US market, potentially boosting US jobs and profits.

Amid this turmoil, Bitcoin has shown surprising stability, holding at around $80K despite traditional market volatility. Its drawdown was significantly less severe than that of major stock indices, suggesting it may be viewed as a safe haven during economic uncertainty.

Factors contributing to Bitcoin’s resilience include its decentralized nature, which insulates it from traditional market shocks, and growing acceptance as a legitimate asset class. Continued institutional interest, driven by entities such as Strategy and BlackRock, reinforces its appeal.

In conclusion, Bitcoin's strength amid tariff-induced volatility underscores its potential as a digital asset, and signals a growing acceptance among investors seeking stability in uncertain economic times. This could signify a pivotal shift within the world’s financial landscape toward viewing cryptocurrency as a mainstream financial instrument.

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Weekly Institutional Insights: Tariffs rattle market as Bitcoin holds better than TradFi

Current US president Donald Trump introduced a universal 10% tariff on imports and higher specific rates for countries like China and Japan, signaling a major shift in US trade policy.

On Apr 2, 2025, Donald Trump announced aggressive US tariffs, including a universal 10% levy on all imports alongside specific rates of 34% on China, 24% on Japan and 20% on the European Union (EU), while the absence of tariffs on Russia was a notable exception. This policy shift resulted in significant volatility in both traditional and cryptocurrency markets.

The timing of Trump's announcement was widely speculated to be strategic, occurring shortly after US stock markets closed in order to mitigate immediate market reactions. However, the following day, Apr 3, 2025, saw substantial declines: the S&P 500 dropped over 5.1%, and the Nasdaq Composite fell more than 5.6%, reflecting investor anxieties about potential economic disruptions and heightened inflation. 

This marked the fifth-worst trading day of the 2020s, with parallels drawn to the infamous Black Thursday in March 2020. But in stark contrast, Bitcoin displayed remarkable resilience, trading around $81.7K, a mere 6% drop from its local bottom of $77K recorded on Mar 10, 2025. This stability suggests that investors may increasingly be viewing cryptocurrencies as a hedge against geopolitical uncertainties, since Bitcoin’s decentralized nature allows it to operate independently of tariffs and supply chain disruptions that affect traditional assets.

Trump characterized the tariff announcement as the beginning of a "Liberation Day," introducing a two-tier system where the universal 10% tariff would take effect on Apr 5, 2025, while reciprocal tariffs targeting around 60 countries would follow on April 9. This reciprocal approach aims to counterbalance existing tariffs imposed by other nations on American products, pushing countries and regions like China, Japan and the EU to reconsider their trade policies. During his speech, Trump presented a chart illustrating the disparities in tariff rates, using it to justify the administration's stance on the need for these measures to correct long-standing trade imbalances.

The implications for Asian countries are particularly severe, with many facing the highest tariffs, including Cambodia at 49%, Laos at 48% and Madagascar at 47%. Economists who favor proactive trade policies view these tariffs as a negotiation tactic, often referred to as a "game of chicken," whereby the US essentially dares other nations to either accept new, more favorable trade terms or face increased costs for their exports to the US. 

Trump argues that many countries impose heavy taxes on American goods that make them less competitive abroad. He believes that by introducing these tariffs, other nations will be compelled to lower their own export taxes on US products, fostering fairer trade conditions. However, critics warn that this strategy could backfire, potentially igniting a trade war damaging to every country and area involved. They express concerns that retaliatory tariffs from other countries might lead to increased costs for American consumers and economic uncertainty for businesses. 

The success of Trump's tariff policy ultimately hinges on whether other nations choose cooperation over confrontation. Proponents of the strategy argue that countries might fear losing access to the lucrative US market, prompting them to negotiate more favorable terms for American exports. If successful, this could theoretically boost US jobs and profits.

In summary, as the situation evolves, the effects of these tariffs on global trade dynamics and market stability remain to be seen, with potentially far-reaching implications for both traditional and cryptocurrency markets.

Amidst the tumultuous landscape created by the recent tariff announcements, Bitcoin has demonstrated a surprising level of resilience. Despite the significant volatility affecting traditional markets, Bitcoin maintained robust support around $80K, showcasing its ability to withstand external economic pressures. This stability is particularly noteworthy when compared to mainstream public equities, which experienced substantial declines in response to the tariffs.

The magnitude of Bitcoin's price drawdown was considerably less severe than that of many established stocks, highlighting its unique position in the financial ecosystem. While indices such as the S&P 500 and Nasdaq Composite plummeted over 5%, Bitcoin's relatively mild decline suggests that investors may increasingly view it as a safe haven and alternative asset during times of economic uncertainty.

This resilience can be attributed to several factors. First, Bitcoin's decentralized nature allows it to operate independently of traditional market dynamics and geopolitical influences, making it less susceptible to the same shocks that impact equities tied to physical goods and international trade. Additionally, the growing acceptance of cryptocurrencies as a legitimate asset class has bolstered investor confidence, leading to a more stable demand for Bitcoin, even in volatile environments. In particular, Strategy’s (formerly MicroStrategy) continued accumulation of Bitcoin and BlackRock’s launch of ETP products in Europe continues to cement Bitcoin’s unique position in equity portfolio allocation.

Furthermore, the current market sentiment indicates a shift in the way that investors perceive Bitcoin, particularly as an effective hedge against inflation and geopolitical risks. As traditional markets grapple with the ramifications of aggressive tariff policies, Bitcoin's ability to hold steady at the $80K level may attract more institutional interest, reinforcing its position as a viable alternative investment.

In conclusion, Bitcoin's resilience within the tariff-induced volatility not only highlights its potential as a digital asset, but also suggests a broader acceptance among investors seeking diversification and stability in uncertain economic times. This comparative strength against mainstream equities could signal a pivotal moment in the evolution of cryptocurrency as a mainstream financial instrument. 

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Bybit x Santiment: Tariffs-led whipsaw solidifies Bitcoin’s resilience

Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

As markets near US president Trump's "Liberation Day" for tariffs, crypto remains volatile. BTC has dropped from a local high of $88K to $82K amid signs that tariffs will affect many countries. Implied volatility has spiked and then eased. Other derivatives market metrics show that BTC and ETH volatility smile skews remain significantly skewed toward puts, a level last seen in March 2023.

Please check out the report’s highlights.

BTC options show signs last seen in March 2023

As crypto prices remain highly correlated with macro-sensitive assets, the week began with a surge in short-tenor implied volatility for BTC and ETH. The sell-off continued as President Trump announced tariffs affecting about 90 countries. BTC's front-end volatility quickly fell below longer maturities, and short-dated volatility smiles briefly favored OTM puts, reminiscent of levels seen during the March 2023 US banking crisis. 

SOL options remain the least traded among major cryptocurrencies (i.e., BTC and ETH), but there was a significant rise in call options this week, dominating both volume and open interest. Following the Mar 28, 2025 expirations, many contracts weren’t reopened, with the notional size of call contracts decreasing from over $3.2M to around $2.5M. However, there has been a slight increase in the notional size of open put options, as traders respond to a continued decline from the January all-time high of $250.

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Bybit X Block Scholes crypto derivatives analytics report (Apr 2, 2025): BTC option skews show a bearish sign last seen in 2023

Fidelity recently announced that it would be launching its own stablecoin, to be pegged to the US dollar. Learn more here.

After first making headlines upon filing paperwork for its very own money market fund, Fidelity seems to be taking the next step toward this grand goal by issuing its own 

 pegged to the US dollar could be the start of a multi-stage scheme to help crypto achieve mainstream adoption.

If you're new to fund-issued stablecoins, or perhaps a crypto beginner whose attention has been piqued, you might be wondering how Fidelity’s stablecoin could impact the crypto market. From highlighting how the Fidelity stablecoin differs from its other fiat-backed counterparts (e.g., 

) to elaborating on the possible motives for launching it, here's everything you need to know about the proposed Fidelity stablecoin.

Founded in 1946, Fidelity Investments has built a reputation as a leader in financial services. To date, it's managed trillions of dollars in assets for individuals and institutions alike. 

Known for its innovative approach to investing, Fidelity has consistently stayed ahead of the curve by embracing new technologies and trends. From mutual funds to retirement accounts, it's fair to say that Fidelity is a trusted name in finance, and has successfully established its presence, thanks to its storied legacy in financial services.

Fidelity’s foray into crypto isn’t new. With the demand for digital asset services growing larger over time, the company has quietly been building its presence in the crypto space through 

 since 2018, with dedicated service that provides custody and trading services for institutional and individual investors.

By launching its own stablecoin, Fidelity is taking this commitment toward 

 innovation to the next level, signaling its belief in the long-term growth potential of digital assets.

Like many of its popular stablecoin counterparts, Fidelity’s stablecoin is pegged to the US dollar. This ensures price stability, a critical feature for traders looking to mitigate risk amid 

. Built on blockchain technology, this stablecoin is ostensibly designed to integrate seamlessly with Fidelity’s broader ecosystem of tokenized financial products. This means users can expect a secure, efficient and transparent digital asset that aligns with Fidelity’s high standards.

 like Tether’s USDT and Circle’s USDC dominate the market, Fidelity’s offering brings something unique to the table: trust. As a regulated financial institution with decades of experience, Fidelity offers a level of credibility that few other stablecoin issuers can match. Furthermore, its focus on regulatory compliance positions it as a safer alternative for both retail and institutional investors.

Fidelity’s stablecoin represents a deliberate effort to integrate its institutional expertise with blockchain’s efficiencies. By creating a dollar-pegged digital asset, the firm aims to serve as a trusted intermediary for clients navigating both traditional and crypto markets. Moreover, the Fidelity Digital Assets division has already laid the groundwork through Bitcoin custody services and 

. The proposed stablecoin extends this infrastructure, allowing institutional investors to transition seamlessly between volatile cryptocurrencies and stable-value instruments without exiting Fidelity’s ecosystem.

The stablecoin market has grown exponentially, surpassing $200 billion in 2025. This surge is largely being driven by demand for volatility hedging and cross-border payment efficiency. Fidelity recognizes that traders and institutions increasingly require reliable on-ramps between fiat and crypto. Its stablecoin offers a compliant alternative to incumbents, such as Tether and Circle, who face lingering skepticism about reserve transparency. By entering this space, Fidelity would not only meet immediate demand, but position itself as a leader in institutional-grade digital assets, thus appealing to risk-averse entities.

The US regulatory landscape under the current administration has shifted decisively toward crypto-friendly policies, and the Stablecoin Innovation Act and the GENIUS Act are advancing through Congress, aiming to establish clear rules for reserve backing and 

 compliance. Designed with Treasury reserves and audit transparency, Fidelity’s stablecoin aligns with these impending standards. By proactively adopting regulatory best practices, Fidelity avoids the scrutiny faced by Tether — and positions its stablecoin as a “gold standard” for institutional adoption.

Stablecoins generate revenue through interest earned on reserve assets. For example, Tether reported over $6 billion in net income in 2024 from its treasury holdings. Fidelity already manages $80 billion in its Treasury Digital Fund, and can potentially monetize its stablecoin reserves while offering competitive yields to clients. This creates a dual revenue stream, consisting of fees from asset management and interest from stablecoin reserves.

The stablecoin market remains dominated by Tether and Circle, but their retail-focused models leave room for institutional alternatives. Fidelity’s brand reputation, combined with its existing relationships with hedge funds and pension plans, gives it a unique edge. For example, its stablecoin could integrate directly with retirement accounts, allowing 401k participants to allocate to crypto without custody risks. This differentiation is critical as rivals like BlackRock and Franklin Templeton expand their tokenized offerings.

While details are still scarce, the following are some likely use cases for the Fidelity stablecoin.

Using Fidelity’s stablecoin for staking

One of the most exciting use cases for Fidelity’s stablecoin is staking. For traders and investors, staking offers an opportunity to 

 by locking up their assets in support of blockchain networks. With Fidelity’s stablecoin, users could stake their holdings with confidence, knowing they’re backed by one of the most trusted names in finance.

Enhancing market liquidity and capital efficiency

Fidelity’s stablecoin is also expected to enhance liquidity across trading platforms. By providing a reliable medium of exchange that 

 fiat currency and digital assets, this stablecoin could streamline trading operations and reduce transaction costs, creating a win-win for traders and exchanges.

Facilitating real-world asset (RWA) tokenization

Fidelity's stablecoin is strategically positioned to drive the tokenization of RWAs by democratizing access through fractional ownership of commodities and real estate, thus streamlining the trading and settlement of tokenized securities as a stable exchange medium. This could ultimately foster a more efficient and transparent payment ecosystem for tokenized goods and services.

How will this impact the current crypto landscape?

Legitimization and mainstream adoption of crypto

Fidelity's established reputation within traditional finance lends significant credibility to the crypto space. This legitimacy can alleviate concerns among mainstream investors who have been hesitant, due to perceived risks or a lack of understanding. By offering a regulated stablecoin, Fidelity signals that digital assets are becoming a legitimate part of the broader financial landscape, encouraging greater participation from institutional and retail investors alike. This increased confidence can lead to wider adoption of crypto-related products and services, integrating them into everyday financial transactions.

Market stabilization and increased liquidity

The substantial capital that Fidelity brings to the market can significantly increase liquidity, reducing price volatility and making crypto assets more attractive to traditional investors. Increased liquidity facilitates smoother trading and reduces the risk of significant price swings, creating a more stable and predictable market environment.

Fidelity's involvement encourages dialogue between regulators and established financial institutions, leading to clearer and more comprehensive regulatory frameworks for stablecoins and other digital assets. By leveraging its existing compliance and risk management expertise, Fidelity can contribute to the development of robust security standards and best practices for the crypto industry. This increased regulatory clarity and security can reduce the risk of fraud and market manipulation, fostering greater trust and confidence among investors.

he introduction of a regulated stablecoin from a trusted institution can accelerate the integration of traditional financial products and services into the 

 (DeFi) space. Such integration can lead to the development of innovative financial instruments, such as tokenized securities and decentralized lending platforms, bridging the gap between TradFi and DeFi while allowing for far greater capital efficiency within the DeFi space.

Driving crypto infrastructure standardization

Fidelity's participation can drive the development of standardized infrastructure and interoperability protocols, facilitating seamless transactions across different blockchain networks and traditional financial systems. This standardization could improve the efficiency and scalability of the crypto market, thereby enabling greater adoption and integration with existing financial infrastructure.

What are the challenges that Fidelity may face?

While Fidelity's late entry into the stablecoin market is promising, due to its institutional credibility and regulatory focus, it does face substantial challenges. At the top of the list of Fidelity’s potential challenges: competing with established stablecoin giants like USDT and USDC will require Fidelity to demonstrate superior transparency, security and seamless integration of the Fidelity stablecoin within existing ecosystems. 

Building trust with a potentially hesitant crypto native demographic and overcoming established network effects will also require strategic partnerships, competitive incentives and a flawless track record in maintaining a stable peg to the US dollar.

The regulatory environment surrounding stablecoins is rapidly evolving. Recent developments such as the 

 (GENIUS) Act signal a more favorable stance toward crypto in the United States. For companies like Fidelity, this creates an opportunity to innovate within clear regulatory frameworks while addressing concerns around transparency and accountability. However, this evolving legislative landscape doesn't mean that Fidelity is out of the woods yet. This is especially so because regulations aren’t uniform across all jurisdictions. Therefore, Fidelity will need to demonstrate regulatory agility and adaptability to navigate these varying requirements.

Lastly, while there’s speculation that the Fidelity stablecoin could play a huge part in the company’s tokenized money market fund offering, there’s currently nothing set in stone. This is due to the inherent complexities of integrating a newly launched stablecoin into existing financial products, as well as the need to navigate potential regulatory hurdles related to that integration. Since Fidelity Digital Assets and 

 are two separate entities, there will likely be some coordination needed before Fidelity can incorporate its stablecoin into its onchain bond market.

Fidelity’s launch of its own stablecoin marks an important milestone in the evolution of digital finance. By combining stability with trust and regulatory compliance, this new offering has the potential to reshape the way traders interact with crypto. For beginners looking for a safe entry point into crypto, as well as experienced traders seeking reliable tools for staking and liquidity management, Fidelity’s stablecoin offers an enticing proposition. 

Likewise, for institutional traders, the proposed stablecoin provides a compliant and secure bridge between traditional finance and DeFi, unlocking new avenues for managing assets and diversifying portfolios. While challenges remain, Fidelity’s entry is poised to accelerate the integration of digital assets into mainstream finance, ultimately paving the way for wider adoption and innovation.

Intermediate

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Fidelity’s new stablecoin: A bold step into crypto stability

Investing

Crypto Investment Guide

Crypto

Crypto fundamental analysis is the first step to formulating a successful trading plan by assessing the asset's intrinsic value. Here's what you must know.

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Investing in cryptocurrencies requires careful research and evaluation of all available metrics. Most projects provide ample information about the purpose of the cryptocurrency, 

, the team behind the project, and its development to date. Using a combination of quantitative and qualitative factors, you can derive a view of cryptos using fundamental analysis. 

A myth among new entrants is that cryptocurrencies cannot be valuated based on fundamental analysis due to high market volatility. However, even though the asset may be subject to the whims of global traders, one can still form an educated opinion on its value.

Understanding fundamental analysis helps you evaluate whether a crypto is worth buying or selling. In this article, we’ll show you how to analyze cryptocurrency using fundamental analysis, including the key factors to consider, and look at how cryptocurrency analysis is different from traditional asset analysis. 

: While a cryptocurrency is a digital token issued by a blockchain project, for this article’s purposes, the terms cryptocurrency, project and token are used interchangeably.

 determines the intrinsic value of an asset, or in other words an objective measure of its worth. Evaluating underlying information about a cryptocurrency project provides guidance on whether it’s undervalued or overvalued as an asset. A cryptocurrency that’s undervalued may present a buying opportunity, whereas one that’s overvalued may indicate it’s time to take profits.

Crypto markets are notoriously volatile. Even established currencies like 

 are subject to sudden fluctuation. Investing in newer cryptocurrencies comes with significant risk unless you understand what you’re investing in. 

Performing fundamental analysis enables non-technical investors and seasoned traders alike to trade market movements with confidence. Armed with fundamental analysis, traders can create informed strategies with better odds of profitability.

Fundamental analysis is distinct from technical analysis, which is typically used by traders and investors who have an interest in forecasting a cryptocurrency’s market direction through the use of 

How Is Crypto Fundamental Analysis Different?

, which is often considered the bible for securities valuation. To this day, investors analyze financial assets using the metrics explained in this classic book. For example, when evaluating stocks quantitatively, you can use earnings per share (EPS) or the price-to-earnings ratio (PE ratio) to determine the intrinsic value of a share.

So far, cryptocurrency isn’t subject to international regulation when it comes to reporting requirements, unlike publicly listed companies that often have to issue quarterly reports using recognized accounting standards. Traditional business metrics, such as liquidity ratios that look at the solvency of conventional companies, are thus irrelevant in the cryptocurrency market. As a result, crypto markets can’t be assessed using the same traditional fundamental analysis indicators used for traditional businesses.

Within crypto markets, all transactions can be publicly “audited” on a blockchain, and the founding team must keep the community informed of their road map. Conceptually, though, investors still need to develop insights into each underlying project. Hence, a different framework has to be set up, with metrics utterly distinct from those used for analyzing traditional markets.

Factors to Consider When Analyzing Crypto Fundamentally

The main goal of cryptocurrency fundamental analysis is to reduce investor risk and evaluate the profit potential of the asset. 

Fundamental analysis can be applied in three broad categories.

 is a valuable resource, providing users with on-chain metrics, or data provided by the blockchain. However, pulling information manually from raw blockchain data can drain time and resources. Fortunately, a range of 

 (APIs) provide tools to empower investment decisions. Leading crypto exchanges have developed reporting tools that provide an abundance of actionable information, such as the number of active users, total transactions and transaction value.

The most fundamental metrics to a cryptocurrency’s fundamental analysis are 

, number of active addresses and transaction count, as well as transaction values and fees. 

Let’s take a closer look at how this data grants trading insights.

Blockchain’s architecture plays a significant role in securing a network, and diving into its data proves to be valuable for cryptocurrency fundamental analysis.

Bitcoin is an example of a cryptocurrency that runs on a 

 (PoW) consensus. PoW blockchains require crypto miners to solve computational puzzles that verify each transaction while preventing 

 control of the blockchain. Should there be a 51% attack, the controlling entity (the network attacker) would have the power to alter or halt other transactions that don’t belong to them, or to 

Hash rate is viewed by many crypto investors as an indicator of the health of the cryptocurrency in question. The higher the hash rate, the more miners are incentivized to mine for profits and the greater the security of the network. Calculating a personal hash rate can also help miners determine their own profitability. 

However, when hash rate begins to decline, miners might begin to find a cryptocurrency unprofitable, leading to “miner capitulation,” which often takes place when markets spiral lower, creating pressure for miners to sell off their hardware. Lower hash rates indicate a loss of interest on the part of investors. 

A cryptocurrency’s current price, transaction volume and fees paid are examples of variables that might affect a mining operation's overall expenses. Direct 

, like electricity and computing power, must also be taken into account.

While hash rate is a valid indicator of the health of PoW blockchains, for 

 (PoS) blockchains (such as Ethereum) the amount of crypto staked is the metric to look at.

 for block validations. Hence, a higher number of staked tokens translates to greater blockchain security.

Another approach is to total the number of unique addresses within predefined periods, and then evaluate the results. 

This metric gives investors a good overview as to whether a cryptocurrency is being consistently used.

A network's activity can be measured by its transaction count. Investors may observe how activity changes over time by plotting the number of transactions for predetermined intervals (or by using 

Please note that this metric needs to be used with caution. We cannot rule out that only one party is transferring money between their own wallets to artificially inflate the on-chain activity, as we’re unable to ascertain the identity of certain active addresses.

Transaction value is a metric that tells investors how much value has been transacted over a certain period of time. For example, if there were five Bitcoin transactions of $250 each, all on the same day, the daily transaction value would be $1,250.

A consistently high transaction value indicates that the cryptocurrency is in steady circulation, while comparisons reveal data concerning potential future market movements.

Within a particular vertical, for example 

, we might see transaction value reducing for one cryptocurrency, but increasing for another. This is a sign that the market is shifting its attention elsewhere, and could signal a potential increase in the cryptocurrency’s price given the demand and activity on it.

Fees reflect the demand on a given blockchain, or how many transactions are paying to be added to the blockchain as quickly as possible. Paid fees can be thought of as bids at an auction: users have to compete with each other to have their transactions executed and included on the blockchain. Those who pay higher fees have their transactions confirmed sooner. Hence, higher fees typically indicate a greater demand from users for their transactions to be included on the blockchain.

Ethereum’s gas is an example of fees paid, but every crypto has its own transaction fees. 

Fees can also give an idea of how secure a cryptocurrency network is. PoW blockchains typically provide a block reward to miners, who help process transactions and maintain the security of a chain. These block rewards are usually made up of the transaction fees. With cryptocurrencies that have a decreasing emission schedule, such as Bitcoin, block rewards are reduced periodically, in an event known as 

When block rewards are reduced, it makes sense to increase transaction fees in order to help miners maintain their profitability. Should the rate of increase in transaction fees not catch up with the reduction in rewards, miners may begin to operate at a loss and choose to drop off the network. This could reduce the security of the cryptocurrency network.

Financial metrics of a cryptocurrency gives a good overview of how well the cryptocurrency might be performing as compared to the past, and also gives insights as to its potential future growth.

Market capitalization is the representation of a network’s value. It can be calculated by multiplying the current price by the supply of the cryptocurrency in circulation. However, 

 can offer misleading valuations if you fail to factor in other metrics, such as liquidity. 

In general, market cap can be used to approximate the growth potential of a cryptocurrency. Some investors believe that cryptocurrencies with lower market cap have greater opportunity for growth compared to those with higher market cap, while others deduce that larger market cap translates to a stronger network effect and infrastructure, which will attract the market’s demand.

Even though forgotten currency, lost wallets and irretrievable keys mean that we’ll never really know precisely how many coins of a given crypto are in circulation, market capitalization offers an approximation for a coin’s network value.

Liquidity is a measure of how easy it is to buy and sell a cryptocurrency. If a cryptocurrency can be bought or sold quickly without drastically altering its market value, its liquidity is considered strong. A liquid cryptocurrency has many buyers and sellers’ orders waiting to be filled. This, in turn, narrows the 

, which is a good measure of liquidity. 

With illiquid markets, the problem faced by investors is an inability to sell the cryptocurrency at a “fair” price. This is because there are hardly any buyers willing to make the trade, which will result in two choices for the investors: they can either lower the price at which they’ll sell the cryptocurrency, or wait for its liquidity to increase. However, note that 

 the cryptocurrency might reduce return on investment over the long term if the price doesn’t increase.

Trading volume is a useful indicator of a cryptocurrency’s ability to sustain momentum. It shows how many units of the cryptocurrency have changed hands over a specific period. If an upward trend in value is backed by a high trading volume, it’s likely that the crypto’s price will continue to increase. Conversely, price fluctuations without significant trading volume may just be blips on the radar. 

 of a cryptocurrency refers to the total number of units in active supply that are publicly accessible. Different from the total supply or the maximum potential supply, the circulating supply isn’t static and can change over time, since cryptocurrencies can be 

The emission schedule is something investors can look at in order to make informed decisions. Some cryptocurrencies are deflationary, with supplies that decrease over time. This is attractive to some investors, as they believe that the reduced supply coupled with increased demand from the market will lead to a price increase. 

On the other hand, cryptocurrencies that may be highly inflationary, leading to a high circulating supply, might make investors wary because the excessive supply could lead to a decrease in price.

Project metrics are used to take a qualitative approach to evaluating the performance of a cryptocurrency. They focus on internal and external factors, such as the purpose of the cryptocurrency and how the project operates.

Project websites typically include a list of their team members, whose collective experience can shed light on whether the group possesses the necessary expertise to see the project through to completion. 

Some of the things that investors may seek from a project’s team include the following:

Background checks can be conducted through networking platforms, such as LinkedIn.

Should a team insist on remaining anonymous, investors have to exercise discretion as to whether they’re deemed sufficiently trustworthy. It’s extremely difficult to track an anonymous team in terms of their developments and background.

The white paper is a technical document that outlines the purpose and operation of a project. It’s the most important of the project’s documents, and should ideally contain the following information:

Examine the white paper with a good dose of skepticism, and look out for third-party reviews about the project that can be shared through platforms such as Discord or Twitter.

Identifying a project’s competitors within its vertical is critical to evaluating the project’s potential. A project may initially seem to be appealing, but this might not be the case when its’ compared to projects of competitors who might have a better team, differentiating product features or higher level of community engagement.

Most cryptocurrency projects have a road map for the future, with a timeline for test nets, releases and newly planned features. The road map should offer a clear outline of future developments. Investors can use it to measure the achievement of milestones, and to determine whether the team is performing according to their plans.

 is the economics of token supply and demand, which drive the value and price of a cryptocurrency. The higher the demand relative to supply, the higher the price. By looking at the token distribution, investors may be able to identify any potential risks. For instance, if only a few people own the vast majority of the supply, they could eventually manipulate the market by dumping all their holdings, causing the crypto’s price to crash.

Tokenomics also includes the incentive structure used to motivate behavior on a network. For example, one prominent tokenomic model that’s been gaining attention is the vote escrow model, in which rewards are used to incentivize crypto users who lock up their cryptocurrency for a period of time. This translates to reduced circulating supply, which plays a part in increasing prices.

The vesting period of a cryptocurrency’s supply must be taken into account. A short vesting period for early investors could result in a situation where they dump a large number of tokens onto the market for profit, leading to the cryptocurrency’s price declining over time.

The utility of a token is something that investors should pay attention to. Some projects create tokens which don’t have much utility. In such cases, the market demand for the token will be low, given that it doesn’t serve a practical purpose. Without market demand for the token, its price is less likely to appreciate.

The team’s development activity can shed light as to whether they’re actively working on the project and are hitting their milestones. Check to see how many contributors there are, and how much activity there is on the project's public GitHub, if it has one. A cryptocurrency whose repository hasn't been updated in two years, or one that gives inconsistent updates, may not be as appealing as one whose development has been consistent.

Quantitative analysis is also a great method for analyzing a cryptocurrency. However, it’s not as helpful in determining its risks, or for aspects that aren’t measurable by a number

Other factors that can come into play in terms of fundamental analysis include government policies, social politics and user behavior.

There have been stricter regulations around cryptocurrencies over the past year amid some of the biggest black swan events, such as the 

 (TORN). This has caused the prices of XRP and TORN to vary significantly based on the ongoing regulatory changes.

As the U.S. government has taken a more active role in clamping down on certain cryptocurrency verticals, an investor will have to evaluate whether the cryptocurrency they wish to invest in might be affected by any negative regulations.

The Covid-19 pandemic gave investors a taste of a truly global crisis and its impact on financial markets. As the pandemic unfolded, all assets, including cryptocurrencies, sold off. 

. Investors took a risk-averse attitude and fled from speculative assets.

In response to this crisis, governments around the world passed trillions of dollars in stimulus packages. As central banks flooded the system with 

, investors turned to cryptocurrencies as a store of value and an inflation hedge. 

Investor behavior is one of the most difficult factors to evaluate. However, recent times have seen users investing based on key opinion leaders (KOLs), typically individuals with a large following on social media platforms including Twitter, Instagram and TikTok. 

How to Analyze a Cryptocurrency Using Fundamental Analysis

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