Bitcoin, despite its high public profile, remains in the realms of the wild west when it comes to deciding whether to invest in it.

However, the original cryptocurrency is now a firm favourite of the market’s technical analysts, which shows that the appetite for crypto-based asset trading has definitely grown among investors.

It is so popular, in fact, that most of the major spread-betting platform operators such as Holdings PLC (), Plus500 Ltd () and Markets.com among others all offer punters the chance to bet on the Bitcoin market.

In many ways, Bitcoin is the ultimate speculative asset, backed by no central authority and seemingly with no intrinsic worth that can be calculated by number-crunching – although some would argue with this point (of which, more anon).

Instead, the price of Bitcoin hinges solely on whether traders think there’s money to be made, or lost, in a cycle of massive highs and crushing lows.

In short, technical analysts who plot a perceived trajectory using concepts like moving averages, support and resistance levels can be big influencers when it comes to decision-making among crypto investors.

Looking to the fundamentals

However, it would be incorrect to assume that Bitcoin and other cryptos are removed from fundamental analysis, the other school of valuing traded assets.

Unlike technical analysis, which tries to work out the trajectory of an asset price based on historical price data and trading volumes, fundamental analysis (much like the name suggests) takes a more granular approach and looks to work out an underlying value.

The fundamental method involves investigating things like the state of a country’s economy, factoring in things like bond yields and the fluctuations of fiat currencies, or, in the case of listed stocks, companies’ profit and loss accounts and balance sheets.

But how can this be possible for Bitcoin when it has no central authority or entity to back up its value?

The answer, according to some crypto analysts, is that Bitcoin does, in fact, have fundamental elements, but, like the decentralised nature of the blockchain system itself, they are very diffuse.

In an article authored in December 2018, independent crypto analyst Hans Hauge said Bitcoin has a number of intangible elements that can be used to calculate its fundamental value.

One example is research and development (R&D), a key intangible when valuing companies; think how stocks in the pharmaceutical sector can rise and fall based on the status of drugs they are developing.

A similar approach can work for Bitcoin, except its R&D tends to happen in the open, rather than in a company laboratory somewhere, due to the open-source nature of the blockchain system.

Hauge cited data from Google Scholar, an online index of…