Is there a way to fundamentally analyse cryptos? | Value Research Dhirendra Kumar explains if analysing crypto is feasible

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Is there a way to fundamentally analyse cryptos?

Dhirendra Kumar explains if analysing crypto is feasible

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Is there a way to analyse cryptos fundamentally, like equity shares for long-term investment?
- PM Annadurai

No, there is absolutely no way to analyse cryptocurrency fundamentally. There is nothing substantial to it. How can you analyse code? How can you analyse a currency? While one can still analyse currency because there are many variables that you get to know about a country. For instance, if India has a very poor balance of payment reserve situation or a very poor or strong balance of trade, we know its impact. If as a country we are going to buy more dollars, or sell more dollars, because we are importing more. So there are many macro-economic variables that we are still able to analyse in the case of a country, that in turn define the state of its currency.

Similarly, you would have read in the newspaper that Turkey has seen a decline in its currency by 45 per cent recently. There is a basis to it. Their balance of trade is low, the confidence in the economy is shallow, the capital flows have come to a standstill, and that is what is translating into this exodus, leading to the decline in value of the currency. In the case of crypto, you don't have any of those.

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