This marks the 3rd post of the ‘Three Reasons’ series. The posts will alternate – a bullish outlook for a particular blockchain project followed by a bearish. Three is an estimate of convenience only. These posts are intended to be brief expressions of my opinion on particular cryptocurrencies and are not exhaustive in detail.
This post does feel a little like low hanging fruit. With the information on hand, a long term positive outlook on EOS is hardly counter-trend. Nonetheless, given the extended bear market and probable short-term downward price pressure on EOS, it is worth having a look under the hood.
All projections are predicated on a multi-year horizon. While its entirely possible EOS may hit new ATH this year, my investment thesis does not rest on near-term gains, mid-2020 being my first inflection point.
The Pace of Development
Cryptosphere projects tend to over-promise and under-deliver. Tech takes time, testing more, regulation and partnership building, still more again. In some respects, prior to the launch of EOS, plenty of unrealistic claims and timelines were indeed, bandied about. Inter-blockchain operability was touted well ahead of actual tech implementation, as was ‘near-infinite scalability’, so there was indeed, an element of over-promising. However, Block.one, the team responsible for the initial deployment of the EOS chain, did not in general, over-reach.
Since the chain actually launched in June 2018 the teams working on EOS have been remarkably measured in promises, yet incredibly productive, in product deployment and tech improvements. Block.one regularly releases substantial updates to the base code – without fanfare, while a host of other teams have both improved the base layer tech and launched applications to run on it or its sister chains.
By any reasonable measurement, the EOS protocol has been a stunning success. A deep and expanding ecosystem of dApps has sprung from the initial launch. The first flush of gambling dApps has petered off but games have arisen to take their place. EOSKnights regularly pulls in over 5k daily users and Prospectors looks set to be a huge success (with nearly 6k Telegram members before launch) but these are just the fist wave. Look 3 years down the road with AAA developers releasing onchain games on the EOS blockchain and the outlook looks very good indeed. Is this inevitable? Of course not, but with studios such as Mythical Games focusing exclusively on EOS and given the already impressive throughput of the chain, EOS is set to at least be one of the gaming chains.
,Crypto is not binary, many chains may become homes to games and gamers and all may succeed – there will not be only one. EOS has smashed its nearest direct competition in terms of dApp daily users, transaction throughput and money moved onchain. While Ethereum will no doubt eventually scale, it has ceded its position to EOS, in terms of daily uses and transaction speed. Tron is also making heady strides and will certainly compete with EOS, but once again the success of one does not preclude the success of the other. In fact, for an investor, competition is a useful driver of focus and innovation. A more in-depth reflection on the profound importance of gaming to future blockchain success can be found here.
Over 4 billion dollars was raised during the year-long EOS ICO. Many feared that Block.one, the recipient of these funds, would simply deploy the chain and run. This fear has not materialized, the one billion dollar venture capital fund rolled out by Block.one dwarfs the funds available to any other crypto project. The development team at Block.one continues to expand now numbering over one hundred. Paltry by the standards of Bitcoin and Ethereum but far beyond most other competitors in the space.
The fact that EOS is exceptionally well funded is critical to its long-term success. It can afford to weather the bear cycle whether it lasts a year or five – few other chains are in such a strong position. EOS has the cash flow to make missteps, to miss deadlines, to fall behind and yet recover. Almost all its competitors are on a knife’s edge, given the extended bear market, second chances do not abound.
Previous Price Action
EOS has twice outrun a reasonable price valuation. It has run past $20 on hype and hope alone, prior to an actual product. Currently trading at under $3 dollars, EOS has not been spared by the bear and as with other alt-coins it remains firmly shackled to Bitcoin (for now). BTC will recover, and when it does so, EOS is very likely to continue its pattern of outperformance relative to other cryptos. The bull may be very good indeed to EOS in the coming years. During the next bull cycle, setting a new ATH of over $25, with an actual product, a user base, and a supporting and expanding ecosystem, seems entirely probable – certain no – probable yes.
Other Price Supportive Considerations
- High profile due to high market capitalization – location, location, location folks.
- Three times a winner – Dan Larimer the lead tech has proven track record of success in the cryptosphere.
- 2019 the year that REX becomes a reality, Block.one begins to rollout its flagship dApps.
- LiquidApps seem to have unlocked scaling (let’s be skeptical for now).
- Governance model and voting beginning to find firmer foundations.
I currently dollar cost average into EOS every two weeks. It comprises 20% of my dollar cost average capital. These funds are disposable income. I remain a buyer for EOS between $0.50 and $5.00. At either point, I will reconsider my interest. I don’t buy more or less EOS within this range but simply buy at market every two weeks. I have a target position in mind for EOS and I am 80% of the way there. I will stop position building once that target is achieved.
These are entirely subjective observations. Do your own research and reflect on your own circumstances and realistic tolerance for risk.
EOS is a high-risk investment – you may lose all your funds. New products emerge, teams dissolve, the market makes its choice, always bear this in mind when considering an investment into any crypto.
Do your own research is not a slogan – if you are at all unclear as to what conducting your own research involves please read the following posts.
Do Your Own Research
Always remain skeptical. Rather than simply accept or reject the thesis of this post – look into it and come to your own conclusions.