Homework post for @allbert || Fundamental Analysis and creating a DCA portfolio

Hello steemians how are you? I hope you all are doing well and you all are safe and healthy during this pandemic time. Hope we all soon get the vaccine.

Today I go through one of the best and simplest language explanation homework posts by @allbert on fundamental analysis and DCA. Now I am Submitting my homework post to the professor.

QUESTION 1:-

ANSWER 1:-

For the fundamental analysis of cryptocurrency I have to choose two Crypto coins,

• Ripple(XRP)
• Dogecoin(DOGE)

In fundamental analysis of both these asset we will discuss Price, Market capitalisation, Price prediction, consensus algorithm, project and many more.

RIPPLE(XRP)

Ripple is a technology that work as both cryptocurrency and digital payment network. It was first developed in 2012 by co-founded by Chris Larsen and Jed McCaleb with the main aim that is to create high security,fast payment system on the web. As I told you that Ripple is the network and the cryptocurreny that is used in this company as a medium of exchange is XRP which is pre mined and is used as medium of exchange. Ripple is working on open source P2P decentralised network which allow to transfer funds, money and exchange money in any currency with a user friendly environment providing fast transaction.

https://images.app.goo.gl/r2NG9ewMQHd7E2MJ9

Now let us see More detailed features of XRP coin that is a ripple coin.

Daily Chart Information:

XRP is tagged as a cryptocurrency that is a medium of exchange developed by ripple company. It is ranked 5th in terms of market capitalisation and also have maximum supply of token equal to 100,000,000,000. Around 46% of the total supply is now completed. Its current price status is $0.6015 with a downtrend of (-2.55%). The current market capitalisation with of this cryptocurrency is $27,798,276,874 with a downfall of(-2.55%). As we talk XRP its last 24 hour transaction is about $1,887,254,554. This crypto shows good trade volume which is a good sign of uptrends in future. Its code was written on C++ and the main ripple website is https://ripple.com/

Consensus Algorithm:

https://images.app.goo.gl/B4LKsJqvbFR1d7px9
The ripple works on protocol consensus algorithm. This distributed consensus system allow fast, economic, decentralised transactions. The main feature of this consensus algorithm is that every technical problem are not considered to be same and hence categorised into 3 types:

• Correctness
• Agreement
• Utility

Let us see what type of technical errors are established in these 3 categories.

• correctness : This category distinguish between correct and dis-honest transactions.

• Agreement: The agreement between party and company is that only real transaction and single transaction can be recognised. This will help yo reduce double spend problem.

• Utility: It means usefulness, that what a network is like for users. For example: latency, computing power.

Not going in much deep we will discuss 3 main axioms of this consensus algorithm.

There are generally two types of nodes faulty and non faulty nodes. Non faulty behaves honestly and don't display an error where as non faulty are those which may be honest but may suffer data corruption or Byzantine errors.

Axioms:

C1: In finite time every non faulty node have to make a decision.

C2: Every non faulty nodes have decided to have same value.

C3: Non failty nodes will have multiple possible values.

Journey of ripple XRP:

With the aim to realise the vision of internet of value ripple was founded in 2012. Then after this form SBI ripple Asia to accelerate blockchain for commercial use in Japan and Korea. Then after the launch interledger protocol to maintain introperability and Legacy Technology. Now to ensure every legal clarity and operational consistency are ripplenet committee is formed. Soon after great success 100 + Financial Institutions join ripplenet. Now company finally available commercially on demand liquidity of XRP. Now 200 + Institutions that are financial join ripplenet. Now to build infrastructure and to help innovative blockchain project ripple X is now established also to support academic research technical development innovation in blockchain and cryptocurrency for Digital payments now the established UBRI. Soon after that MoneyGram start using on demand liquidity e to power ripplenet in Mexico and United State full stop after that 300 plus financial institutes join Ripple net. Now finally azimo drawing on demand liquidity E for faster International payment within Philippines. This is not the end of the journey of ripple it will grow more.

Investors:-

Ripple xrp include globally recognised venture capital firms and strategic investor which make this company grow more every year. There are more than 5 investor.

accenture, ANDREESSEN, CME Ventures, CORE INNOVATION CAPITAL, GV, Santander innoventures, SBI Group, Digital ventures SEAGATE, standard chartered, Tetragon.

Management team:

Ripple management team is a combination of experience in technology, financial services and compliance. Ripple xrp leadership team have total 8 members.

Name	Post
Brad Garlinghouse	CEO
David Schwartz	chief Technology officer
Eric Van Miltenburg	chief business officer
Asheesh Birla	GM off ripplenet
Monica Long	GM of rippleX
Kiersten Hollars	people places and communication SVP
Stuart Alderoty	general counsel
Devraj Varadhan	SVP of Engineering

Scalable:

Scalable feature of XRP is much much better than Bitcoin and ethereum. Ripple coin consistently handles 1500 transaction per second and work 24X7.
Bitcoin only handle 3 to 6 transactions per second and ethereum handle 15 transaction per second.

Eco friendly and user friendly:

The XRP ledger complete xrp transactions quickly without harming or using high energy that is associated with proof of work or mining. Due to its fast transaction scalable transaction and low cost transaction it become user-friendly.

Social media:

Ripple is highly active on Twitter. They join Twitter in 2013 and now they have 1.9 million followers and a verified Twitter account. They also active on reddit posting everyday content.

They also have an activated people website which update every single project and roadmap of ripple company and xrp coin.

---

Why we choose Ripple XRP for fundamental analysis?

So for our fundamental analysis we choose Ripple xrp. But the question is why we choose this coin, so there are four factors which allow me to analysis this coin more deeply. Historical data, price estimation, exchange list the coin and future predictions. Let us discuss all these four factors to make our fundamental analysis more deep.

Historical Data :

History of this coin was quite good somewhere in 2018 this coin touch 3 dollar. But after that show downtrend. But it's a huge success to gain 3 dollar within 6 years of development. This coin still above half way dollar mark and Hover near 0.6 dollar.

Exchange list XRP :

Although few exchanges de list the coin but the biggest exchange Binance have listed the coin and traders eight reading this coin using Binance. Many exchange delist the coin due to to the fight between Ripple and Sec US security council.

Future Prediction:

There are many future predictions For Ripple XRP. The recent long term forecast is stating that by the end of 2021 ripple Mein hit 1.5 dollar and by end of 2022 it may come to to its higher at 3.5 dollar. They also cleared the roadmap till 2032. By 2025 and they may reach $5 and by 2030 it may touch $35. Finally by 2032 may reach $50 mark. By looking this prediction one May become very curious to analyses this coin and invest in it.

News :

Few months ago ripple xrp stuck in a case with Security Council of United States. And because of that ripple show a huge downtrend. But still people is fighting the case which shows their strength to be in the market. Also ripple xrp maintain its stability 0.6$.
After all this lawsuit and cases still people believe people will grow up to hi so they are investing and trading ripple coin everyday which we can see in 24 hour trading volume of ripple xrp.

So this is my fundamental analysis on Ripple(XRP).

DOGECOIN(DOGE)

Dogecoin is a cryptocurrency that was founded as a joke find programmers Billy Markus and Jackson Palma who wanted to make fun of the crazy cryptocurrency speculation of the time. Notwithstanding its humour nature some people regarded as the visible financial opportunity. Dogecoin is considered to be the meme coin. It was initially released on 6th of December 2013. Its operating system are Microsoft Windows Android iOS and Linux. One of the biggest feature is its block time and block reward its block time is 1 minut and block reward is 10000 coin. Dogecoin is promoted as fun and friendly internet currency which is the peer to peer digital currency.

https://images.app.goo.gl/5QUUc7uzTZwjNSh69

Now let us see in depth analysis of Dogecoin and its features.

Daily chart information:

Dogecoin is tagged as a mineable cryptocurrency that is a medium of exchange developed by two software engineers. It is ranked 8th in terms of market capitalisation and also have already supply 130,453,358,912Dogecoin. Its current price status is $0.1834 with a downtrend of (-4.83%). The current market capitalisation with of this cryptocurrency is $23,879,080,388 with a uptrend of(+4.83%). As we talk DOGE its last 24 hour transaction is about $10,56,466,096. This crypto shows good trade volume which is a good sign of uptrends in future. Dogecoin is a meme coin and is also a highly influenced point in cryptocurrency.

Consensus Algorithm:

https://images.app.goo.gl/Bh1h4MoYRpcgCMGr5
As same as Bitcoin, dogecoin also and open source decentralized peer to peer network that use proof of work consensus algorithm. It use scrypt Technology in there proof of work consensus algorithm. By using scrypt it simply means that minor cannot use Bitcoin mining process and equipments like SHA-256 and will use dedicated FPGA and ASIC devices for mining. It is considered to be the more confusing and complex process which secure the network also. As told you above dot coin use proof of work in which a minor can validate data block of transaction by solving the complex cryptographic mathematical problem. With every verified agreement it add a new block to the dogecoin network. To mine dog coin one have to use highly secure and fast hardware equipment and graphic cards how to solve as fast as one can.

Journey Of Dogecoin:

Dogecoin journey start on 6 of December 2013 when it is officially launched. After launch in first 30 days more than millions of visitors visit the official website of dogecoin. On 19th December 2013 within 72 hours dogecoin jump 300%. On 25th December 2013 one of the major incident happen where millions of dogecoin stolen by hacker from a online cryptocurrency wallet. This incident increase social network of dogecoin on Twitter with the negative impact. On January 2014 dogecoin overcome Bitcoin in 24 hour trading volume but stay behind Bitcoin in market capitalisation. In 2017 and early 18 dogecoin reach it peak at 0.017 dollar and its market capitalisation become 2 billion dollar. In 2021 dogecoin went up 800 % in 24 hours To 0.07 dollar. After the influence by Elon Musk in February 2021 dot coin start showing uptrend and bye Earth Mein 2021 It moved to its up hi position greater than 20000 per cent increase it reach 0.7 dollar. But now days dogecoin is showing huge downtrend because of negative influence by big investors and tweets. On 9th May 2021 space x announce that it will fund mission to the moon by dogecoin and it will be the first mission funded by dogecoin. So it is the small journey of dogecoin till now and it will grow more.

Investors

A mysterious wale is the largest investor and the holder of dogecoin that whole 36.7 billion dollar coins worth of 15 billion dollar. Glauber Contessto 33 old year guy work in Los Angeles hold doge coin and roughly in May 14th his daughters coin holding become roughly 2 million dollar.

Social media:

Dogecoin is highly active on social media. It is available on Facebook Twitter reddit discord and also have a website that is inactive website.

On Twitter dogecoin is a verified account having 1.9 million followers. The joint Twitter in December 2013 and in description they write "elon musk things we are pretty cool."

On Facebook they have a community of more than 1 lakh followers and update their page every day. Their cover photo is a dogecoin dog on moon.

On discord they have more than 30000 members chatting about cryptocurrency and doge coin investment everyday.

Scalable :

Through calculations it is calculated that dogecoin can process 70 transactions per second and a bitcoin can process 7 transactions per second. But in real transaction practically dogecoin can process 40 transaction per second and Bitcoin can process four transaction for second which means that the point is 10 time more scalable and faster than Bitcoin. Dogecoin is also faster than ethereum.

Eco friendly and user friendly:

For every single transaction dogecoin used 0.12KWh of energy per transaction. This list dot coin among the cryptocurrencies with least energy usage. In comparison with Bitcoin which consume 707Kwh energy per transaction. Because of fast transaction highly scalable and High security coin is considered to be the user-friendly coin.

---

Why we choose Dogecoin DOGE for fundamental analysis?

So for our fundamental analysis we choose Dogecoin DOGE. But the question is why we choose this coin, so there are five factors which allow me to analysis this coin more deeply. Historical data, price estimation, exchange list the coin, future predictions and social influence. Let us discuss all these five factors to make our fundamental analysis more deep.

Historical data :

History of this coin quite interesting and good. Recently this coin touch 0.7 dollar mark but after that its show are huge downfall because of few negative influence by biggest investors and specially the tweets by Elon Musk. But still this coin maintain its value to 0.18$ And will soon reach up to high once again.

Exchange list Dogecoin:

Dot coin are listed in many exchanges like Binance,Upbit,OkEx, Huobi Global, Coinbase pro, Kucoin, crypto.com, Bittrex and so on. If a coin is listed in more than 40 exchange then it means it has a potential to gain high.

Future Prediction:

Right now the situation of dogecoin is not very good but its future prediction by long-term forecast experts it's quite interesting and good. According to the long term forecast in 2021 dogecoin may reach 0.9 dollar. In 2022 to it may take a resistance on 2.3 dollar and by 2025 it may take support at 4.9 dollar and resistance at 7.83 dollar. This future prediction allow a trader to invest long term in dogecoin.

News :

News plays major role in updating our information. I found this article which is published on 4th may 2021. It says that in 2021 doge coin jump 14000%. It is really an exiting thing to understand and also why this happen. So i choose this coin for my fundamental analysis.

Influence :

Doge coin is highly influenced cryptocurrency. The major influencer of this coin is elon musk. He tweets on regular basis for doge coin.

When price reaches 0.7 dollar,it is only because of his tweets people invest in dogecoin alot and enjoy huge profits that time. So influence pays major role in its price. In his one tweet he says that he will be using dogecoin for funding in spacex moon mission.

These are the factors that allow me to do fundamental analysis.

QUESTION 2:

ANSWER 2:

Through my Binance verified exchange I am purchasing Ripple XRP coin. I will use my 30 steem to purchase Ripple XRP coin for 10 USD.

Follow these steps to complete purchase:

• First let us transfer steem to my verified binance account. Go to wallet and click on transfer fill the required information that you will get from binanace market. Type active and complete steem transfer.
  

• Now after 5 mins you can see steem in your binance wallet which is equal to 10 usd.
  
  You can also see that I already have XRP of rupees 5.52 dollar.

• Now sell steem and convert it into ethereum because binance don't allow to convert directly steem to usdt.
  

• Now after selling steem its time to convert Ethereum to usdt, so sell ethereum and take 10 usdt.
  

• Now visit homepage and click on the market option show below on the taskbar. It will take you to the market where you can search your coin that you have to buy.
  

• Now search XRP and click on XRP/USDT you will find it as 1st option in spot market.
  

• After clicking on XRP you can find the graph and an option to buy and sell. Click on buy option to move further to buy the Asset.
  

• Now fill the Amount for which you want to buy XRP, i am buying it for 100% i.e. 10 usd. So i filled it and complete my order by clicking buy. I get 18 XRP in total.
  

• Finally our purchase is completed and we can see the order history by clicking it.
  

• You can also check your wallet for confirmation wether your purchase of asset is complete or not. In my case i have 16$ in my wallet as i alreay have 5.52$ previously.
  

Through my verified Exchange account i have make a real purchase of one of the cryptocurrencies selected in the first assignment that is XRP.

QUESTION 3:

ANSWER 3:

DCA means Dollar cost average is an investment strategy that a user use in which investor divide its total amount into small investments and invest into market time to time. It helped trader and investor to secure himself from high fluctuation of the market.

Let us try to apply this strategy on two Crypto asset. I will apply this is strategy that is dollar cost average on Ripple xrp and dogecoin. Both these Crypto I have already used for my fundamental analysis. Now let us try to apply this unique strategy of investing on it. It is true that dollar cost average reduce risk and increase profit of a user in the market

Ripple(XRP)

For this practical on Ripple xrp I choose 25 dollar in total five trades that means $5 each trade. Show in 5 trades I will go and invest 5 dollar each. Since ripple coin is a penny currency so investing 5 dollar is a good amount.
The chart given below is prepared on tradingview on a day time frame.

Date of investment	price	invest	No. of coins
19 may	$1.6101	$5	3.105XRP
26 may	$1.0488	$5	4.767XRP
5 june	$0.9862	$5	5.069XRP
21 june	$0.8152	$5	6.133XRP
10 july	$0.6842	$5	7.307XRP

Now Total amount of investment is : $25
Total XRP coins collected : 26.381XRP

so the average price of XRP will be :

Total investment/Total coins collected

25/26.381 = $0.9476

Now my average price is $0.9476. It simply means that if i sell my 26.381 tokens at a price higher than this average price then only i will be getting a profit.

So, My selling point will be above my average line. As my price fall from $1.6101 to $0.6842. So I can set take profit near or somewhere at $1.27( this value is mean of high price and average price) and stop loss at $0.64 which will allow me to take 1:2 risk reward. I dont think so i will suffer loss because i can still hold this coin. If its price fall, i will collect more.

Now there are two situation, may be my take profit level get a hit or my stop loss. So what is the percentage of loss and profit ?

Take profit percentage:

Stop loss percentage:

DOGECOIN(DOGE)

For my practical approach to purchase Dogecoin I am using DCA with an investment of 50$ which i have decided to divide in 5 instalments. So in every instalment i will be investing 10$.

Date	price	invest	Dogecoin collected
20 may	$0.41968	$10	23.82DOGE
30 may	$0.32138	$10	31.11DOGE
20 june	$0.30418	$10	32.87DOGE
30 june	$0.28452	$10	35.14DOGE
10 july	$0.22308	$10	44.82DOGE

Total amount investment: $50
Total coins collection: 167.76 DOGE

Average price will be equal to amount invested divided by total coins collected:

50/167.76 = $0.2980

Now my average price is calculated at $0.2980. If I sell my dogecoin, At a price higher than the average price then I will be getting earnings and good profit.

My price get downtrend from $0.41968.So make good profit set take profit at $0.4172. Now my stop loss will be at $0.20864. This will be in a situation of 1:2 risk reward. If My stop loss break out then i will choose to buy or invest more because selling will give me loss.

Now there are two situation, may be my take profit level get a hit or my stop loss. So what is the percentage of loss and profit ?

Take profit percentage :

Stop loss percentage:

Conclusion

Now its time to conclude our homework post in which we discuss about ripple xrp, dogecoin and complete its fundamental analysis with the factors of of market capitalisation investors consensus algorithms journey and historical data. After that we purchase ripple xrp in my verified binance account. I already have 5 dollar Ripple and again I purchase it for $10 because I think people has high potential to grow in this year. Finally we use dollar cost average investing strategy on dogecoin and Ripple xrp. By taking 5 entries I complete the process and finally calculate the profit and loss percentage.

Thankyou professor @allbert