Fundamental Analysis
Fundamental Analysis is the process of analyzing a stock or in this case a cryptocurrency based on its merits (price/book value, price to earnings, price/active users) verse technical analysis which is the use of past price and volume patterns to predict future value. Technical analysis is much more common in the crypto world because fundamental analysis of crypto tokens differs so much from that of traditional stocks that there are no established methods for doing the fundamental analysis.
After 6 months of producing my Daily Investor Report, I believe that I have developed a series of metrics for determining the health of the STEEM token. Below I will run through my primary metrics:
Daily Active Users
The fundamental driver of a significantly higher STEEM price will be mass adoption of the Steem blockchain. Therefore, Daily Active Users is my fundamental tool for tracking progress towards that goal. I've calculated the correlation between Daily Active Users and the STEEM and while it is not my strongest correlated value, maintain it as a key metric.
Steemit.com Site Traffic
A common benchmark in the startup community is 'organic' growth which is growth from referrals, search engine based discovery, unpaid media coverage, and many other types of user growth you didn't have to pay for. This is considered a much stronger sign of a solid product than 'paid' growth where a startup pays for adverts/affiliate programs that only last as long as the company has the capital to maintain the campaign. The Alexa ranking is a proprietary third party measurement of a website's traffic ranked against other websites across the globe. Our improving Alexa ranking shows the increased internet traffic Steemit.com is receiving which improves our Google Search Ranking and allows for more new users discovering the Steem blockchain.
Steemit's current growth is primarily organic with some users running small ad campaigns but most of our growth coming from referrals, search engine based discovery, and news coverage. Steemit's Alexa ranking also has a very strong correlation to the Steem price since November.
Percent of STEEM 'Vested'
The % of STEEM Vested is one of my favorite topics of discussion in my Daily Investor Report. I use it to measure the supply of liquid STEEM available for trading on the exchanges and the changes in % vested trends have had powerful impacts on the price of STEEM. The below chart shows some of the analysis I've done on how the % vested indicator correlates to the STEEM price. Keep reading to find out how to get a more detailed explanation.
Relationship between the Price of Bitcoin and STEEM
There is no way to avoid the dominate crypto, Bitcoin. Most cryptos are tied to its fate and STEEM is no exception with over 95% of STEEM traded on exchanges in the STEEM/BTC pair. I've calculated a very strong correlation and created a chart to show those who prefer pictures of statistical measures of correlation (I'm an engineer ... I 💘 math).
The Truth
This entire post is just a teaser of what is available in the New Crypto Report. The missing charts and results of the correlation calculations are contained in the full report along with a detailed discussion of the risks to the Steemit platform and the Economic Moat concept popularized by Warren Buffet.
The Crypto Report report costs just 3 SBD and is a collaborative effort between @digicrypt & @leongkhan. It covers 9 cryptocurrencies including a through Fundamental and Technical Analysis of the STEEM price. I've had several requests for a deeper look at the fundamentals driving the STEEM price and here you are!
We've also included predicative analysis for the STEEM price for the rest of July and from now to the end of the year!
This report is an experiment, if you support a detailed monthly Crypto Report with a focus on STEEM please purchase the report and resteem! The instructions for purchasing are in @digicrypt's post.
Disclosure:
The report published above is based on my assessment of the cryptocurrency market. Investors should consider this report as only a single factor in making their investment decision. All investments involve market risk, including possible loss of principal invested. The author is a cryptocurrency investor and while he seeks to provide honest assessments to the best of his ability may have a conflict of interest that could affect the objectivity of this report.
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