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How to Invest In NEO In 2021

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NEO is a major cryptocurrency project that is notable for being one of several tokens that has undergone a rebranding. Originally known as Antshares, NEO was renamed in June 2017, with the intention of reflecting its new qualities. 

The vision of the developers of NEO is to realise a smart economy by using blockchain technology and smart contracts to issue and manage digitised assets. The NEO blockchain is based on a Proof of Stake decentralised Byzantine fault tolerant consensus mechanism, which can handle as many as 10,000 transactions per second.

In March 2018, NEO's parent company Onchain distributed tokens for every 5 NEO held in a user's cryptocurrency wallet. These tokens will be used to vote on system upgrades, identity verification mechanisms, and other governance issues on the NEO platform. This article will discuss how to invest in NEO. 

4 Ways to Invest in NEO

There are a variety of different ways to invest in NEO, but in this section of the article, we will examine four of the most popular.

1. Buy NEO Through an Exchange

Purchasing NEO through a cryptocurrency exchange is undoubtedly the most common way to buy NEO. There are a wide range of digital exchanges available, and a major taken such as NEO is purchasable through all of them.

If a wallet is connected to the internet, it is defined as a hot wallet. The term 'hot' signifies the fact that it is always ready to be accessed because of its online connectivity. They are less secure as compared to cold wallets but are more user-friendly.

Since they have online connectivity, hot wallets are more prone to cyberattack and security breaches.

Cold wallets are better suited for those traders and investors who want to store their digital assets for months or even years. These investors are often called 'HODLers' as they are looking to hold their digital currency for a long period to ensure major gains. They don't have the urgent need to access their coins and they just want their cryptocurrency funds to be secure.

Although exchanges tend to have storage provisions built into them, it is always advisable to purchase a hardware wallet to store your NEO tokens. Some of the hardware wallets compatible with NEO include the following:

Users must carry out a comprehensive and thorough review of some of the most popular crypto wallets before finalising. A number of factors including user-friendliness, convenience, price and security should be evaluated before selecting a NEO wallet.

In order to benefit from the services of cryptocurrency exchanges, it will first be necessary to join a platform of your choosing. This requires registration, and there are certain requirements inherent in this process.

It is usual for exchanges to require government identity documentation and proof of address to proceed. Most exchanges are also compliant with Know Your Customer (KYC), which refers to the process of verifying the identity of your customers, either before or during the time that they start doing business with you. 

Our recommended exchange

Although there are many exchanges available online, we would recommend paying heed to the recommendation that follows.

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 NEO Through an Exchange

One possibility with cryptocurrency is to purchase fractions of a particular token through an exchange. This is possible with NEO, due to the relatively high price of a single token. Exchanges will allow cryptocurrency investors to purchase 0.01 NEO tokens in a single purchase. 

3. Trade NEO Through a Broker

Another approach to trading cryptocurrency is to get in contact with a dedicated broker. This is a significantly different process to cryptocurrency purchases through an exchange, as a broker represents an intermediary between the investor and the market.

Cryptocurrency brokers are experts in the field, who will both conduct market activity on behalf of investors, and also offer a range of other services. It is important to confirm that a cryptocurrency broker is regulated and experienced in the market before trading NEO. Additionally, your broker should have state-of-the-art security systems in place, while always operating in compliance with international regulations.

Our recommended broker

There are many cryptocurrency brokers available online, but we would recommend investors to choose their particular broker carefully, and pay heed to the following advice.

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 a NEO ETF

Another option for cryptocurrency investors interested in NEO is to invest in an ETF (Exchange Traded Fund) contract. These can be used to trade a particular cryptocurrency through the traditional stock market, and are also useful given their ability to combine a diverse set of currencies into a single tradable asset.

A cryptocurrency ETF works much in the fashion of a traditional contract, tracking an index or basket of assets, and moving dependent on market activity. Cryptocurrency ETF contracts are already available in a number of different countries, although regulators in the United States have blocked this concept thus far.

Considering the fast-moving pace of the cryptocurrency market, many investors consider ETFs to be an ideal way to trade.

5 NEO Investment Strategies

There are a range of different investment strategies possible with a cryptocurrency such as NEO, so in the following section, we are going to examine five of the most popular. The characteristics and suitability of the strategies will vary greatly depending on the experience, level of investment, and market positioning of the investor.

1. Buy and ‘Hold’ 

What is it?

The first common strategy for NEO and other cryptos is to buy and hold the token, with the hope of price appreciation occurring over a period of time. This strategy is conducted by those who believe in the fundamentals of altcoins such as NEO, and believe that they will increase in value.

What is the benefit of using this strategy?

The major advantage of buying and holding NEO is that this requires very little manual input from an investor. This is a long-term strategy, intended to benefit from the underlying qualities of the market, rather than day-to-day fluctuations in price.

Another advantage of buying and holding is that it enables crypto traders to take control of a physical asset, which could then theoretically be used for other purposes. Again, this differs from trading that takes place over a shorter timeframe.

2. Day Trading

What is it?

Day trading is one of the most commonly conducted practices in the traditional stock market, and is usually the focus of market discussion. Day trading refers to the practice of purchasing and selling securities, equities, commodities, and other assets within a single trading day.

There is no reason why day trading cannot occur in any market, but historically it has been most commonly conducted in the foreign exchange and stock markets. Day traders must be educated and leveraged, using high amounts of equity in order to capitalise on tiny price movements, which occur in relatively short time periods.

With this in mind, day traders must be pursuant of all major market issues. Economic statistics, corporate earnings, interest rates, and other issues which can have a short-term impact on the market are all of critical importance to daily traders.

Another aspect of day trading that has become particularly popular, especially with institutional investors, is so-called high-frequency trading. This sees investors often use supercomputers in order to place a vast number of trades in a short period of time, in order to take advantage of tiny market movements.

What is the benefit of using this strategy?

The obvious advantage of day trading is that it can realise a profit in an extremely short timeframe. By placing multiple trades in a 24-hour period, traders are able to walk away with hundreds, or even thousands, of dollars.

Conversely, there is a lot of risk involved in day trading, and those engaging in the process must have an intimate understanding of the market and its movements. But day trading typically provides investors with better leverage than holding positions overnight, and has thus become massively popular in the stock exchange.

But those looking to invest in NEO should ensure that they are extremely confident in their ability before entering into a day trading strategy.

3. Shorting

What is it?

Shorting is one of the most commonly used strategies in the stock market, and involves an investor taking a short position on the assets being traded. This means that the investor will effectively bet that the cryptocurrency will decline in value in the near future. Those who are sceptical about the fundamentals of the cryptocurrency market will opt for this particular trading strategy. Shorting can also take place over a shorter period of time, although it tends to be associated with a longer cycle.

What is the benefit of using this strategy?

The immediate benefit of shorting is that it enables an investor to make a profit even in a bear market. 

Shorting can also be used as a hedge against an overall strategy. We will explain hedging in detail later in this article.

4. Using a Trading Bot for trading

What is it?

Using a crypto trading bot is another way of profiting from the crytocurrency marketplace. There are a wide variety of automatic trading software programmes now available, and this removes the need for a user to manually participate in the market.

Trading bots are based on machine learning and artificial intelligence techniques, using algorithms in order to enable a sophisticated computer program to understand the movement of the market. Results associated with trading bots have been extremely impressive, and this means that many investors at all levels of the market are now choosing this approach.

What is the benefit of using this strategy?

Again, this is another strategy that removes the need for a hands-on approach. The major advantage of utilising an algorithmic trader is that it will conduct all trades for an investor, meaning that there is no manual input required.

Training bots also enable the emotion to be removed from the process of trading, which is always an issue for human investors. Algorithmic traders are also able to participate in the market over a much longer period than will be possible for a human equivalent.

5. Hedging NEO

What is it?

Hedging any asset involves engaging in contrary trades to provide insurance against your market position. Hedging is essentially a form of protection, intended to ensure that an individual investor is not too heavily exposed to a particular market opposition.

In the case of NEO, it is more likely that an investor would hedge against volatile activity in the cryptocurrency market with other trades. However, there is no reason in theory why NEO couldn't be purchased as a hedge in its own right.

What is the benefit of using this strategy?

The obvious benefit of hedging is that it is an insurance policy against unwelcome outcomes. Anyone hedging against a particular asset is protecting themselves against an undesirable outcome. This is thus an investment strategy that is conducted by the most sophisticated and institutional investors, as it helps them to balance their investment positions in choppy waters.

Buy NEO Today!

What to Consider Before Investing in NEO

It’s important to consider several aspects of the contemporary market before investing in NEO, or any cryptocurrency. While there are huge opportunities for those choosing to invest in cryptocurrencies, it is also true that the niche is quite challenging and technical. So it is therefore important to be aware of the issues that we will discuss in the section.

Fees

The NEO network uses a fee structure with two types of fees; system fees and network fees. All fees are paid in the native utility token GAS (NeoGas). The NEO network currently allows only 20 low priority transactions per block, so paying a higher network fee during a high-traffic period can result in a faster transaction. Exchanges will also typically levy a fee of around 0.1% for NEO transactions at the time of writing.

Risks

Although cryptocurrency offers massive opportunities, there are also risks associated with the medium. In particular, the cryptocurrency market is known to be somewhat volatile, and this can result in big losses as well as large gains.

Cryptocurrencies also remain relatively unregulated, although both governments and central banks have made moves to alter this in recent years. Nonetheless, the traditional financial architecture remains more regulated than the crypto space.

Another issue with cryptocurrencies is that they are susceptible to error and hacking. It is impossible to prevent technical glitches in the crypto niche, and there will always be risks of criminal enterprises attempting to steal tokens. However, it should be noted that investments in any field are always potentially subject to theft.

Cryptocurrency can also be discontinued or significantly altered by hard forks, and this can have a massive impact on the underlying market. CFD contracts which are often used for cryptocurrency investment are also considered to be high-risk and speculative products. 

Overall, it is important to ensure that you have familiarised yourself with all of the risks, and tread carefully once you have done so.

Payment methods

There are a variety of payment methods available for NEO, with virtually every major fiat currency being supported, along with some solutions as PayPal, Skrill, and Neteller. It is also possible to exchange the market-leading Bitcoin and other altcoins for NEO as well.

Why Invest in NEO?

NEO has had an incredible year in the markets, increasing in value four-fold during 2021. This is partly due to the bull market in cryptocurrencies, but also thanks to the particular qualities of NEO. The price of NEO is $64 at the time of writing.

The smart economy supported by NEO is a major selling point. This makes it possible to digitise physical assets on the blockchain. Once digitised, they can stay on the blockchain and enjoy benefits, such as being decentralised, transparent, trustful and traceable.

NEO has also used smart contracts, and these have proved hugely popular. Unlike Ethereum, creating smart contracts on NEO doesn’t require the learning of a new programming language. This means that any developer can get started and build a smart economy on the NEO platform.

Neo also supports dApps development, while its blockchain has been praised for being particularly slick and sophisticated. Neo is also a highly innovative system.

Summary of Investing in NEO 

NEO is one of the brightest young cryptocurrencies available in the niche, with an impressive portfolio of features, and a record of successful performance in the market. NEO already has a market cap in excess of $2 billion, and this is expected to increase further still in the future as per some investors.

NEO is also relatively affordable when it comes to its fee portfolio, and this process is conducted in such a way to afford NEO investors extra functionality and responsibility.

There are a wide variety of trading options and strategies available for NEO.

It is also important for investors to manage risk by making use of a hedging strategy. New investors should look to gain experience before using leverage and committing higher capital. 

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