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How to Invest In EOS In 2021

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EOS is a cryptocurrency that runs on the EOS.IO blockchain. Introduced in 2018, EOS delivers a smart contract platform, which claims to completely eliminate transaction fees. It is also extremely fast, capable of conducting millions of transactions every second.

One billion EOS tokens were distributed as part of its initial coin offering. The developers were hugely successful in raising $4 billion during this process, and EOS became high profile as a result of this huge investment. This guide will discuss how to invest in EOS and it will also explain some of the strategies for investing in this popular token. 

4 Ways to Invest in EOS

There are a variety of ways to invest in EOS, but here are four of the most prominent and commonly used. All these approaches can be used with or without leverage. 

1. Buy EOS Through an Exchange

Firstly, it is possible to buy EOS through the many online crypto exchanges. Because of the nature of the cryptocurrency, virtually all buying and selling it takes place on the Internet, and EOS is no exception.

While most exchanges have storage provisions built into them, it is generally advisable to download a hardware wallet solution when trading EOS and other cryptocurrencies. For top security and, if you hodl for long-term investments then you should use hardware wallets. However, if you are a user who performs daily transactions, you should use a desktop or mobile wallet, though they are not as secure as a hardware wallet, they are the most convenient for daily transactions. Wallets are classified as hot and cold depending on whether they are connected to the internet or not. Cold wallets are considered a comparatively safer option as they do not require a constant internet connection and are thus suitable for long term investors. 

Some of the hardware wallets that are compatible with the EOS include the following:

To trade via a cryptocurrency exchange, budding investors will first need to register. This typically involves confirming one's identity, which is usually achieved via government identity documentation and proof of address.

Most digital exchanges online are compatible with Know Your Customer (KYC) regulation, which refers to the process of verifying the identity of your customers, in the way that regulated bank customer identity verification practices are currently conducted. This serves the purpose of assessing and monitoring EOS risk. 

Our recommended exchange

While there are a variety of exchanges available online, in this section, we will discuss our particular recommendation.

1
Min. Deposit
$50
Exclusive promotion
User Score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA

2. Buy Fractions of EOS Through an Exchange

It is not possible to purchase fractions of EOS via an exchange, as the price of EOS simply isn't high enough. When exchange fees are taken into consideration, it would also prove to be largely pointless. Examples of coins that do allow fractional purchases are Bitcoin and Ethereum.

3. Trade EOS Through a Broker

Another way of trading EOS is via a broker, which is usually conducted online as well. The popularity of internet trading has had a massive impact on the availability of brokers, and there is now a wide variety of choice in this area.

Online crypto brokers are effectively intermediaries, who conduct trades on behalf of an investor, also charging fees for this privilege. They are expected to be experts in the market, and also knowledgeable about its mechanisms.

As trading cryptocurrencies can be rather complex, brokers are certainly useful, particularly for those entering the market for the first time. Brokers also offer a wide variety of other services, meaning that they can deliver additional functionality that isn't necessarily possible with an exchange. 

This makes brokers an excellent option for those purchasing EOS for the first time. But it's also important to ensure the credentials of your broker before committing, and also that you can access the platform associated with the broker via both desktop and mobile applications. 

Our recommended broker

There are many different brokers available for EOS, but we do have a recommendation in this area.

1
Min. Deposit
$50
Exclusive promotion
User Score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA

4. Invest in an EOS ETF

Another option for cryptocurrency traders is to utilise ETFs (Exchange Traded Fund), which have commonly been used in the traditional stock market. ETF contracts make it possible to bind together a diverse range of cryptocurrencies into a singular tradable asset, offering investors increased flexibility.

Cryptocurrency ETFs effectively work the same way as ETF contracts related to other assets. They are subject to changes in price throughout the trading day, as investors purchase and sell tokens. ETFs are generally seen as an excellent way for new investors to enter the currency markets, and are already available in several countries.

5 EOS Investment Strategies

There are a wide variety of investment strategies for EOS, so in this section, we will discuss five of the most popular.

1. Buy and ‘Hold’ 

What is it?

Buying and holding cryptocurrency involves purchasing tokens from one of the platforms mentioned previously, and then holding them for a significant period. This is usually a long-term strategy, and it is one that appeals to people who fundamentally believe in EOS, and other cryptocurrencies, as an asset class.

Unlike other methods of trading EOS, the buy and hold strategy does not work on a short-term basis. Investors engaging in a buying and holding strategy are essentially waiting for the asset to achieve price discovery, which may happen weeks, months, or even years into the future. Buying and holding has traditionally been popular with commodities such as Gold and Silver, and is becoming an increasingly common feature of cryptocurrency trading as well.

What is the benefit of using this strategy?

The obvious benefits of using this strategy is that it is a low maintenance approach to investment. There is no input required in the market, and thus investors who buy and hold assets may not even follow the market particularly closely. Many buying and holding investors believe that a currency will elevate in value over a period of time, and are thus willing to hold the token until this materialises.

Another benefit of the strategy is that investors are less obviously exposed to fluctuations in the market, with EOS being part of a niche that is notoriously volatile.

2. Day Trading

What is it?

Day trading refers to the practice of purchasing and selling assets or securities within a 24-hour period. Day trading is one of the trading options available to those interested in cryptocurrencies, although it should only really be taken on by those who are experts in the field.

Typically associated with the foreign exchange and the stock markets, day trading can occur in any marketplace. Day traders are usually knowledgeable about the market, and can often use leverage significantly as well.

Day trading enables savvy investors to capitalise on tiny price movements, which occur on a regular basis in the cryptocurrency marketplace. A variety of short-term market sentiments are of interest to day traders, with information such as economic statistics, corporate earnings and interest rates potentially important.

In recent years, day traders have also used high-frequency trading in order to soup up their approach. 

What is the benefit of using this strategy?

Day traders can make a profit in a short period, and then even reinvest the money that they have made on the very same day.

Day trading also tends to provide superior leverage than holding positions on an overnight basis, as occurs in swing trading. However, there are definitely risks associated with day trading, and it should only be entered into by those with significant experience in the cryptocurrency marketplace.

3. Shorting

What is it?

Short selling has become hugely popular in currency markets, and is a strategy that can also apply to cryptocurrencies such as EOS. Shorting effectively involves betting against a particular cryptocurrency, with short selling investors believing that the token in question will decline in value. Shorting makes investors money when stock declines in value, while a portion of an investment can be lost when shorting if the asset related to the sale increases in value.

What is the benefit of using this strategy?

Shorting is particularly useful in the cryptocurrency space, as it enables investors to make a profit even in a bear market. Rather than simply wait for price discovery, short selling makes it possible to profit from assets, such as cryptocurrency, even when they decline in value.

It should also be noted that shorting is often used as a hedging mechanism, and we shall discuss this technique in more detail shortly.

4. Using a Trading Bot for trading

What is it?

One of the new innovations available in the marketplace is trading bots. These are used across a variety of asset classes, but are particularly compatible with the world of cryptocurrency, given its digital nature.

Trading bots are robotic traders, based on algorithms, which make intelligent decisions automatically to benefit human investors. Trading bots draw on artificial intelligence and machine learning techniques to devise sophisticated trading strategies.

What is the benefit of using this strategy?

There are several advantages of using artificial intelligence in EOS training. The first is that it is a labour-intensive way of investing, with little input required from a human being once the initial parameters have been settled.

Another advantage of trading bouts is that they take the emotion out of investing completely, making what are essentially cold decisions. Trading bots are not vulnerable to the vagaries of the market, as is the case with human traders.

Trading bots are also flexible, widely available, and able to trade on a 24/7 basis. Using an algorithmic trader can enable an interested party without cryptocurrency experience to begin trading in such tokens as EOS without garnering a vast amount of knowledge.

5. Hedging EOS

What is it?

Another strategy associated with EOS trading is hedging, and this is a technique used by many institutional and savvy investors. Hedging involves taking a contrary position to protect a trading portfolio against undesirable outcomes.

In the case of cryptocurrency, hedging is particularly popular, as it is known that the cryptocurrency market can be fairly volatile. This means that one may hedge against EOS declining in value by making a contrary investment that supports this position.

What is the benefit of using this strategy?

Hedging is one of the most pragmatic strategies involved with trading cryptos, as it effectively provides insurance against unpalatable market conditions. By hedging in the cryptocurrency investment market, investors protect themselves from losing money. When this is done particularly shrewdly, there are certain circumstances in which hedging effectively can mean that an investor wins no matter what happens in the market.

Invest in EOS

What to Consider Before Investing in EOS

There are a variety of factors that must be taken into consideration before investing in EOS. The cryptocurrency market place is undoubtedly one that offers huge opportunities, but there are significant challenges associated with the niche as well. So in the following sections, we will discuss some of the issues that are particularly important before embarking on EOS investment.

Fees

There are no fees to send or receive EOS. Instead, the protocol requires EOS to use resources like RAM, CPU, and network bandwidth. It also rewards the entities that run the network periodically with new EOS, effectively substituting inflation for transaction fees.

When trading EOS via an exchange, investors can expect small amounts to be levied as a charge. This is usually around 0.1% per transaction. Nonetheless, overall there is no doubt that EOS is particularly competitive in this department.

Risks

Although the cryptocurrency marketplace offers huge opportunities, there are also risks associated with investing in tokens such as EOS.

The first issue is one that has been mentioned previously in this article, namely that the cryptocurrency market place is volatile. Tokens can go down as well as up, and there are definitely risks associated with speculating in the cryptocurrency market.

It can also be asserted that cryptocurrencies remain relatively unregulated. This is a gap in the cryptocurrency niche that has begun to be closed, though, with regulation and legislation being passed in recent years. Nonetheless, it is still not entirely decided whether cryptocurrencies can be considered commodities or virtual currencies, and some grey areas persist with regards to regulation.

Hacking and human errors can also be problems with cryptocurrencies, while coins can even be discontinued due to financial difficulties or hard forks. Nonetheless, it should be noted that these problems are issues with conventional cryptocurrencies as well, and shouldn't be solely levelled at altcoins. While theft can be an issue with cryptocurrency, this is absolutely true of all investments.

Payment methods

There are several payment methods available for EOS purchases, with an array of fiat currencies supported. All major fiats should be available for EOS purchasing and trading, while other platforms such as PayPal, Skrill and Neteller are also available. EOS can also be purchased with some of the other major cryptocurrencies, such as Bitcoin and Ethereum.

Why Invest in EOS?

There is no doubt that the completely fee-free status of EOS is a hugely attractive aspect of the system. This is very bullish for EOS going forward, with many crypto enthusiasts  believing that this system has huge potential.

Similarly, the developers of EOS have demonstrated that this token and blockchain is particularly fast and efficient, and this must be a massive positive factor for the future of this altcoin. Security, safety, and sophistication are all built into EOS, and this would seem to point to the crypto token being a sound investment.

EOS has also performed superbly in the market during 2021, with its market cap more than doubling in value. The road ahead for the entire financial market is less than certain, which means that cryptocurrencies such as EOS are likely to remain bullish in the foreseeable future as per expert traders. EOS is currently trading at $6.5 at the time of writing. 

Summary of Investing in EOS

EOS has been a success story during its short life, establishing itself in the top 25 cryptocurrencies by market capitalisation. This is an excellent achievement for a token that has only been in existence for a few years. Many in the EOS community believe that it can continue to climb to greater prominence in the years to come.

This has partly been achieved due to the non-existent fee structure associated with this cryptocurrency project. This has undoubtedly made the EOS token attractive to both investors and cryptocurrency enthusiasts.

Those wishing to invest in EOS have several options available to them, as this is a token with good long-term potential. Its developers have plans to expand the EOS project further still, providing a potential upside to investors.

As with any cryptocurrency, or any investment, those wishing to participate in the market should remember that EOS can go down in value as well as up. New users must practise risk management and make use of strategies like hedging as crypto investments are a volatile insturment. 

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