Crypto glossary
Fundamental analysis
Fundamental analysis is a way of valuing a crypto asset by studying its use, revenue, token supply and adoption rather than its price chart.
Fundamental analysis tries to estimate what an asset is worth by looking at the project behind it instead of its recent price moves. For a cryptocurrency, that means asking what problem the network solves, who uses it, how much activity and fee revenue it generates and how its token captures any of that value.
Analysts read the whitepaper and documentation, check tokenomics such as total supply, inflation and upcoming unlocks, and compare valuation metrics like market cap or fully diluted valuation against fees, active addresses or total value locked. On-chain data adds a layer that traditional markets lack, because usage on public blockchains can be checked directly.
The method has clear limits in crypto. Many tokens give holders no claim on a protocol's income, activity can be inflated by incentives or wash trading, and narratives often move prices far more than fundamentals in the short term. It is usually combined with risk management rather than used alone.
Example
An analyst comparing two hypothetical lending protocols might note that one earns $50 million a year in fees at a $500 million market cap while the other earns $5 million at the same valuation, and treat the first as cheaper on fundamentals.
