Since its launch in 2009, Bitcoin has attracted the attention of countless investors and technology enthusiasts with its unique decentralized characteristics and high volatility. As an emerging digital currency, Bitcoin is not only a tool for speculation, but also an important part of the future financial system transformation. To understand the true value of Bitcoin, fundamental analysis is particularly important. This article will explore the core elements of Bitcoin fundamental analysis from multiple aspects to help readers better understand this complex and fascinating asset.

First of all, the supply and demand relationship of Bitcoin is one of the core elements of fundamental analysis. The total supply of Bitcoin is limited to 21 million, and this fixed supply makes Bitcoin scarce. Just as the value of gold lies in its scarcity, the limited supply of Bitcoin has also made its value in the market gradually increase. In recent years, as more and more institutional investors and large companies have begun to accept Bitcoin, the growth in demand has further pushed up its price. For example, Tesla announced in 2021 that it would invest $1.5 billion to buy Bitcoin. This news instantly triggered a heated response in the market, pushing the price of Bitcoin to a record high. Changes in the supply and demand relationship directly affect the market price of Bitcoin. Therefore, investors need to pay close attention to market dynamics in order to adjust their investment strategies in a timely manner.

Secondly, Bitcoin's network effect is also an important part of fundamental analysis. The network effect refers to the fact that as the number of users increases, the value of the network also increases. In the Bitcoin ecosystem, more users mean more transactions, more application scenarios, and higher security. Bitcoin's expanding user base has led to its increased acceptance around the world, which in turn has enhanced its status as a means of storing value. For example, more and more merchants have begun to accept Bitcoin as a payment method. Users can not only purchase goods with Bitcoin, but also enjoy lower transaction fees and faster payment speeds. This trend has gradually transformed Bitcoin from a technical experiment to a mainstream means of payment, and has also laid the foundation for its future value growth.

Furthermore, Bitcoin's technical architecture and security are also important components of fundamental analysis. Bitcoin is based on blockchain technology, and every transaction is recorded in a transparent and tamper-proof distributed ledger. This technical feature not only ensures the security of transactions, but also improves the transparency of the system. The decentralized nature of the Bitcoin network makes it uncontrolled by any government or financial institution, which is undoubtedly a huge attraction for investors who want to avoid inflation and financial risks. At the same time, with the continuous development of technology, the security of the Bitcoin network is also constantly improving. For example, the Lightning Network technology that has emerged in recent years aims to increase the transaction speed of Bitcoin and reduce transaction fees, further enhancing its feasibility in practical applications.

In addition, the legal and regulatory environment of Bitcoin is also a factor that cannot be ignored in fundamental analysis. Different countries have different attitudes towards Bitcoin. Some countries regard it as a legal means of payment, while others implement strict regulatory policies on it. For example, the Chinese government once again strengthened its supervision of Bitcoin mining and trading in 2021, resulting in drastic market fluctuations. This policy change directly affects investor confidence and market stability. Therefore, when investing in Bitcoin, investors must always pay attention to the policy trends of various countries in order to better assess risks and benefits.

Looking at the market participants of Bitcoin, understanding the composition of market participants is very important for fundamental analysis. The Bitcoin market includes not only retail investors, but also institutional investors, hedge funds and exchanges. The entry of institutional investors has injected a large amount of funds into the Bitcoin market and changed the supply and demand pattern of the market. For example, the establishment of Grayscale Bitcoin Trust has enabled ordinary investors to invest in Bitcoin indirectly. The convenience of this investment method has attracted a large amount of capital inflow. In addition, as more and more financial products are developed around Bitcoin, the liquidity and maturity of the market are also constantly improving.

When conducting a fundamental analysis of Bitcoin, the combination of technical analysis and fundamental analysis is also an aspect that cannot be ignored. While fundamental analysis focuses on analyzing the intrinsic value of Bitcoin from the perspectives of supply and demand, technology, and security, technical analysis provides a way to predict future price trends through historical price and trading volume data. The combination of the two can help investors understand market dynamics more comprehensively and develop more effective investment strategies. For example, when fundamental analysis shows that demand for Bitcoin is rising, and technical analysis shows that the price has broken through a key resistance level, investors may choose to enter the market.

Although there are many uncertainties about the future prospects of Bitcoin, it is certain that Bitcoin's position in the global financial system is constantly improving. As more and more companies and institutions begin to accept Bitcoin, the market's recognition of its value is also increasing. At the same time, the continuous advancement of technology and the increasing acceptance of digital currencies by society will create a more favorable environment for the development of Bitcoin. In this context, investors should not only pay attention to short-term market fluctuations, but also look at the investment value of Bitcoin from a long-term perspective.

In short, the fundamental analysis of Bitcoin involves many aspects, including supply and demand, network effects, technical architecture, security, legal supervision, and market participants. A deep understanding of these factors can not only help investors better grasp the investment opportunities of Bitcoin, but also provide important decision-making basis for them in a complex market environment. Faced with the ever-changing market, investors need to maintain keen insight and pay attention to market changes at all times in order to seize every possible opportunity in the Bitcoin investment journey. Bitcoin is not only an investment tool, but also a part of the future financial system, which is worthy of in-depth thinking and exploration by everyone who pays attention to the financial market.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Bitcoin is a digital currency managed by a large decentralized network. Using peer-to-peer remittances helps to transfer funds to accounts in any country instantly without any additional transaction fees. This makes international remittances easier than ever before. Bitcoin eliminates the gap between domestic and international transfers. As we all know, the role of a decentralized network is to verify transactions and issue new currencies to the market, and the issuance of new currencies is also controlled by the underlying technology. Many investors are not familiar with fundamental analysis in the process of investing in Bitcoin. So what exactly does this Bitcoin fundamental analysis mainly analyze? Let the editor of the currency circle analyze it for you.
 What aspects does Bitcoin fundamental analysis mainly analyze?
1. Bitcoin’s characteristic value from the perspective of macro-environment and actual usage ratio
The characteristics of Bitcoin are "limited supply" and "decentralization". The limited supply characteristic is relative to legal currency, so it is particularly important to understand the monetary policy trends of major central banks. As for decentralization, it is reflected in the characteristics of blockchain as a P2P transfer network and no need for a third party as a clearing unit.
Observation indicator 1: Money supply of the world's three major central banks
Expanding QE is good for Bitcoin, which has a limited supply! Bitcoin has a "limited supply" characteristic because the reward for miners logging into the block is halved every four years, so the total supply of Bitcoin will eventually converge to 21 million. On the other hand, we can see that the supply of legal tender continues to expand. Whenever the economy is in recession, central banks of various countries have adopted interest rate cuts and QE bond purchases to expand the supply of legal tender. Such monetary policies are often difficult to reverse, so the overall supply of legal tender has been increasing year by year in the long run. In an environment where the supply of legal tender has increased significantly, the value of Bitcoin's "limited supply" is also particularly highlighted.
Observation indicator 2: NVT indicator
The higher the Bitcoin market cap/on-chain transaction volume, the higher the Bitcoin valuation! NVT (Network Value to Transactions
The Bitcoin Ratio (BTC/USD Ratio) indicator calculates the ratio of Bitcoin’s market value to the actual on-chain transaction volume. This indicator is used to evaluate the rationality of Bitcoin’s price as a transfer network (whether it is overvalued or underestimated).
When the NVT indicator shows an upward trend, it means that the price of Bitcoin may be overvalued, which is not conducive to the subsequent price trend; on the contrary, when the indicator is downward, it means that the price of Bitcoin may be underestimated, which is conducive to the subsequent price trend. It should be noted that the on-chain transaction volume does not include transactions on centralized exchanges and related derivatives (such as Bitcoin futures), and is only included when Bitcoin is transferred on the chain.
2. Timing of Bitcoin Layout from the Perspective of Miners’ Operations
Since miners are the main participants in the cryptocurrency market, the Bitcoin market is closely related to the operating conditions of miners. Therefore, understanding the operating conditions of miners can serve as an important reference for determining whether Bitcoin is suitable for investment at present.
Observation indicator three: computing power ring
The computing power ring turns negative, and the long-term layout buying opportunity emerges! "Computing power" is an estimate of how many operations each node can perform per second in the process of miners obtaining Bitcoin rewards through mining, and the unit is hash/second. The higher the computing power, the more computers (miners) are involved in computing mining. In the long run, the computing power continues to rise, because more and more miners join and the performance of mining machines is constantly improving. As for the "computing power ring", it is the difference between the "short-term moving average" and the "long-term moving average" of the computing power, which can be used to evaluate the current computing power compared with the past period of time.
 How does Bitcoin work?
As a new user, you must install a Bitcoin wallet on your computer or phone. The wallet will generate your first Bitcoin address, and you can create more addresses as needed (depending on the wallet you use, this may or may not be simple).
There are three different wallet applications including the full client, the light client, and the web client. You can link your address with your friends so that they can pay you and vice versa.
Bitcoin works on a public ledger called the blockchain. All confirmed transactions are included in blocks. It allows Bitcoin wallets to calculate their spendable balance so that new transactions can be verified, ensuring that they belong to the spender. The integrity and chronological order of the blockchain is enforced by advanced cryptography.
Hopefully, investors will be able to understand clearly what aspects of Bitcoin fundamental analysis are analyzed through the above article. You should know that transactions are transfers of value between Bitcoin wallets, which are recorded forever on the Bitcoin blockchain. Bitcoin wallets retain a secret data, the private key or "seed". This "seed" is used to approve transactions, providing mathematical proof that they came from the owner of the wallet. The signature also prevents transactions from being changed by anyone after they are issued. All transactions are broadcast to the network, which usually takes 10 to 20 minutes, although they can be slow if the blockchain is very busy. There are now some simple tools that allow anyone with a smartphone to buy and use cryptocurrency.