What is EOS trading and is it safe?
The EOS blockchain protocol emerged in 2017 and was developed further by private developer firm block.one, which specialises in blockchain technology. Later that year, block.one unveiled an initial coin offering (ICO) for EOS coins, which would eventually fetch over $4 billion – a record for any ICO.
The brains behind the EOS project are block.one CEO, Brendan Blumer, and its Chief Technology Officer, Daniel Larimer. The latter has been involved in several altcoin projects in the past, most notably Steemit and Bitshares. Larimer is thought to be the mastermind behind the EOSIO software and the alternative consensus mechanism utilised on the EOSIO blockchain – delegated proof-of-stake (DPoS).
The following years, block.one revealed its open-source software to the masses, enabling developers to design and build dApps for the EOSIO ecosystem. It circulated more than a billion EOS coins to facilitate this marketplace.
Is crypto trading safe when it comes to the EOS project? You can argue for and against this question. First and foremost, the price of EOS makes it significantly less of a risk to trade than well-established cryptocurrencies like Bitcoin. As of 20 July 2021, the price of EOS was just $3.20 per coin.
However, it’s always important to be vigilant and wary of altcoins. Most carry significant volatility that can turn profitable trading positions into significant losses within a matter of hours. Although the price of EOS may be $3.20 as of 20 July 2021, its value was as high as $12.95 on 12 May 2021, losing more than two-thirds of its value in just over two months. It’s also important to bear in mind that, unlike established cryptocurrencies like Bitcoin, Ethereum and Litecoin, EOS is not so freely accessible on crypto exchanges. That’s why many retail cryptocurrency traders use contracts for difference (CFD) platforms that enable users to speculate on the price of EOS, without having to own the underlying asset.
How to trade EOS online
Choose an exchange platform & open an account
There are more than 100 cryptocurrency exchanges that currently support EOS transactions – both buying and selling. This includes established exchanges like Binance, Huobi Pro, BigONE, Bitfinex and Coinbase Pro. UK-based cryptocurrency traders should note that the Financial Conduct Authority (FCA) recently prohibited Binance from undertaking any regulated financial activities in the UK as of June 2021.
Of course, with any crypto exchange you choose, you’ll be required to store the EOS coins you buy in a crypto wallet. If you don’t want the hassle of owning and storing your EOS investments, you can always solely trade the price of EOS with any of our recommended CFD brokers. Be sure to read our comprehensive reviews of the best EOS trading platform sites that can make it easy to go long or short on the price of EOS with a minimal investment.
Buy some EOS
If you’d like to own some of your own EOS coins, you will need to select a cryptocurrency exchange that you trust and a cryptocurrency wallet that supports EOS coin storage. As we’ve already said EOS can be bought and sold in over 100 crypto exchanges today. Those with the highest trading volumes include KKCoin, Huobi Pro, BEQUANT and Loex.
Once you’ve formalised your new cryptocurrency exchange account by verifying your identity – usually achieved by uploading a government-issued ID – you can then deposit into your exchange using fiat currency like GBP or USD.
If your exchange supports it, the best trading pair to buy EOS for UK-based crypto traders is EOS/GBP. This will show the real-time market value of a single EOS coin in British pounds. This value will rise and fall over time, based on market and technical factors.
We’ve already mentioned the raft of CFD brokers that support the trading of cryptocurrencies, including altcoins like EOS. When you trade with a CFD broker, you enter into a contractual agreement. Both parties commit to paying the other the difference in the value of a crypto asset, depending on its value when opening and closing a trade.
This means you can go long (buy) or short (sell) the price of EOS with a CFD broker, without owning the underlying asset. The contractual arrangement with your broker means that if you go long on EOS and the price continues to rise, your broker is obliged to pay you the difference between your open and closing position. Similarly, if you go short on EOS and the price continues to fall, your broker must pay you the difference between your open and closing position.
However, if your long position sees the price of EOS fall below your entry point, you will be obliged to pay the difference to your broker. If your short position rises above your entry point on EOS, you will also be obliged to pay the difference to your broker.
There are two ways to profit from EOS online trading. If you believe the price of EOS will rise, you should go long (buy) it with your chosen CFD broker. If you believe the price of EOS will fall, you should short (sell) with your chosen CFD broker.
Close your position to take a profit or cut a loss
When you trade EOS online with any of our recommended CFD brokers, it’s easy to close open positions on EOS. Whether you’re securing a profit or taking a loss, most CFD brokers make it possible to execute trades at the click of a button. They support state-of-the-art trading software like MetaTrader 4 and 5 – or provide their own proprietary EOS trading UK-based platform to manage positions. This software makes it possible to set stop loss orders or take profit orders to define your risk-reward ratios.
If you did not close an open position, your funds would be at the mercy of the market. It’s important to keep a tight rein on your open positions and look for steady incremental gains rather than large profits and losses.
Tips to trade EOS
If you are new to the EOS trading market or new to cryptocurrency trading online altogether, here are a few pointers to get you started with mastering your crypto trading positions.
Learn what moves EOS’ price
The most likely influencer of the price of EOS is investor interest and market news. In many ways, EOS lagged behind many other altcoins during the start of 2021, but the price of EOS bounced over 100% in May 2021 following the news of renewed investment from investors. Block.one revealed it had obtained funding worth $10 billion to unveil a new subsidiary named Bullish Global.
Bullish Global will be block.one’s very own cryptocurrency exchange, backed by a string of venture capitalists. The EOS blockchain will be utilised to audit every transaction processed, bringing together the benefits of decentralised and centralised crypto exchanges.
For interest in the EOS blockchain project to be sustained long-term, block.one also appreciates the need to redesign incentives for those prepared to stake their EOS holdings. If these staking rewards materialise it could be transformational for the EOS project and its coin value.
Pick an EOS trading style and strategy
If you are looking to embark on EOS online trading for the first time, you’ll need to understand there are two types of trading styles. The first is known as technical analysis trading and the second is classed as fundamental analysis trading. The former is normally utilised by the most experienced cryptocurrency traders with a handle on historical charts, as well as real-time graphs to plot points of support and resistance. This enables technical EOS traders to trade within a defined price range.
The latter requires crypto traders to keep their fingers firmly on the pulse of industry news. Any positive or negative news stories relating to the EOS project can send its price soaring or falling as a result. The best fundamental crypto traders can quickly digest the latest news releases and ascertain the overall market sentiment to inform a new long or short position.
If you like the idea of using historical indicators, price graphs and charts to determine trading positions for EOS, technical trading strategies will suit you down to the ground. The most common beginner strategy for technical analysis is to monitor the moving average of the price of EOS. This has long been a dependable barometer for a short or long-term shift in price action and trading volumes. In addition, stochastic oscillators are another technical indicator that you should look to master to quickly highlight when an altcoin like EOS is deemed overbought or oversold. In these trading conditions, the price of EOS would be ripe for a potential price reversal and a short-term scalp.
On the flip side, if you prefer the research element of fundamental analysis and digesting news fast, time is certainly of the essence. The key is receiving news feeds and updates directly to your computer or mobile device. If you are too slow in receiving updates or press releases, it’s highly likely you will miss the boat on the price move. The last thing you want is to enter at the top of a price move upwards or the bottom of a price move downwards, as the price could quickly reverse and leave your position in the red.
Decide whether to go long or short
One of the main benefits of trading cryptocurrencies using CFDs is the freedom to buy or sell an asset (without technically owning the underlying asset). By going long on EOS, you are ‘buying’ the price of EOS. This means you will turn a profit from a long trade if the price continues to move higher than your initial entry point. If you choose to go short on EOS, you are ‘selling’ the price of EOS. This means you will turn a profit from a short trade if the price continues to move lower than your initial entry point.
You should be able to use technical or fundamental analysis to pinpoint short or long-term trading trends on EOS.
Set your stops and limits
If you decide you are happy to start trading EOS with a reputable CFD broker, you will be given direct access to state-of-the-art cryptocurrency trading software to manage open positions in the market. This software makes it possible to define stop loss and take profit orders before you even execute a long (buy) or short (sell) position on EOS.
A stop loss is important as it can provide a risk-reward ratio for your cryptocurrency trading. You can define how much of your initial stake you are prepared to lose in a single position. Similarly, take profit orders also make it possible to define what percentage returns you wish to achieve from a single EOS trade.
As with all forms of cryptocurrency trading, it’s vital as a retail trader that you do your research first in order to avoid investing in a crypto project that’s experiencing a downturn without your knowledge. We’ve put together the key risks to trading an altcoin like EOS, so that you’re fully in the picture:
- Scepticism surrounding the project’s founder
There is a genuine question mark surrounding the founder of the EOS project, Dan Larimer. Mr Larimer has launched a string of PoS cryptocurrency projects in the shape of Steemit and Bitshares. With both of these projects, reports of insider token creation plagued them. Such negative press affected the EOS project, with many still uncertain of Mr Larimer’s intentions.
- Limited project updates raise uncertainty
The EOS project has had very little airtime in recent months, due largely because there have been very few project updates to speak of. This lack of activity is another red flag for traders of altcoins. There have only been two major updates to EOSIO since September 2019, with the latest only recently released on 13 July 2021 (EOSIO v2.2).
- Highly volatile compared with other altcoins
Make no mistake, the price of EOS has been one of the most volatile altcoins in the crypto space. So far in 2021, the price of EOS has been as low as $2.50 and as high as $12.95. In the space of nine days (15 May 2021 – 24 May 2021), the price of EOS managed to crash from $11.26 to just $4.26. This equates to a loss of 62% in just over a week. There are very few traditional assets that lose their value so rapidly, so this is also something to bear in mind.
The prospect of EOS trading online carries risk, but it can yield plenty of benefits too. It is an altcoin that is attracting significant sums of investment, but is still very much in its infancy as a project.