Making a profit with speculating on the bitcoin price: the fundamental analysis
Welcome to step 3 of the the course “Investing in bitcoins”. In this chapter, you will learn an investment strategy for profiting with bitcoins. This strategy is called the ‘fundamental analysis’.
3.1 What is the fundamental analysis?
The fundamental analysis involves looking for an opportunity to invest in. This could be a news article online, but can also be from the radio or television. The idea behind this strategy is that the bitcoin value is influenced by events. Consider the following examples:
- Example 1: The platform that enables you access to bitcoins crashes. Momentarily bitcoins are not accessible. This incident reflects the instability of bitcoins. This causes the demand for bitcoins to decrease. The drop in consumer confidence will cause the value of bitcoin to fall as well.
- Example 2: There is a global news broadcast stating that bitcoin is an easier and faster method of paying. The attractiveness will cause more people to buy bitcoins, increasing the demand. When demand rises, price also tends to rise.
Practical examples of using the fundamental analysis
To show you how the fundamental analysis exactly works, we have created some practical examples. Click here if you want to read about profiting from an increase in bitcoin value. Do you want to see a practical example of profiting from a drop in bitcoin value? Then Click here.
In step 4 you will learn a second method for trading in bitcoins.