Cryptocurrency Fundamental Analysis: 4 Ways to Gauge the Strength of a Community
When conducting fundamental analysis on a coin, you have less metrics to analyze compared to when performing analysis on traditional stocks.
Determining the strength of a community is a measure of its Social Media channels, and its community discussion forums.
For Social Media, check out:
1. Find the coins subreddit and check for these two metrics:
- How many members are in the subreddit
- What is the general tone of the subreddit? Negatitve or Positive?
- Is there a strong community of long term holders?
2. Look at the coins Twitter and look for the same metrics.
- How many followers do they have?
- Search the name of your coin and look at top posts, again, look for the general tone, positive or negative.
- Look at past tweets from the account, how is news received by the community?
- Search for the cash tag, for example, Bitcoins cashtag is $BTC: bottom feeders on Twitter love to spam cash tags. This way you can see if there are any pump and dump groups that favor your coin (which is a bad thing, don’t fall victim to a pump and dump).
3. Find the coin you want to research on CoinMarketCap.
Go to it’s website, and use the links on the left hand side to find where the community lives and breathes.
It’s most likely on either Telegram, Discord, or Slack.
See how active these chat rooms are.
Do people know each other?
If members of the community are familiar with each other thats a good sign that they’ve stuck around for a while.
Are people complaining a lot?
People get antsy fast when devs don’t release new updates, if people are complaining, it might be a sign to stay away from the coin.
4. Ask a question and see how fast/friendly the response is.
Customer service and chat moderation is pivotal to a strong community. If you ask a question about the official wallet and no one gets back to you — that’s not a great sign.
If you ask a question and 5 members of the community answer it — that’s an extremely good sign.
If the members of a community are brand evangelists, and acting almost as customer service reps, they really believe in project.
If you want to take it a step further, I wrote this guide on investing in cryptocurrency that goes into much more detail on how to actually purchase crypto, and my favorite tools for determining good coins.