How To Invest In EOS - Step-by-Step Guide
Founded by Block.one in June 2018, the EOS platform's idea was proposed by Brendan Blumer and Daniel Larimer. EOS is a network that aims to enable the developer community to easily build decentralised apps known as dApps. The main objective is to encourage as many developers and programmers as possible to embrace blockchain as their primary tool.
EOS network's native coin is also denoted by EOS and, at the time of writing, it is trading around $5.20 which is 100% up from the start of the year. The current market capitalisation of the token is close to $5 billion.
Table of Contents
Invest in EOS in 3 Steps
Get an EOS Wallet
When you want to invest in EOS or any other cryptocurrency, you need to get a secure and suitable cryptocurrency wallet. You can find different types of wallets including hardware wallets, software wallets and paper wallets. These serve a specific type of investor depending on their trading strategy and use. That being said, you need to take a multitude of factors into account when getting a wallet including security, performance, coin accessibility, customer support and more.
Join an EOS Exchange
Invest in EOS
Signing up on the platform will involve providing your personal information including name, contact number, country and email. You will also need to set a strong password. Every popular and leading crypto trading platform will verify your identity through documentation which may include your ID card or driver's license. Cryptocurrency services do that to ensure compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations which prevent illegal and fraudulent activities on the platform.
Investing in EOS Explained
Before you start investing in EOS, your priority should be to get a secure wallet. The most important features for choosing a wallet include security, accessibility to coins, control over private keys, backup, additional security features like 2FA and more. There are different types of wallets for different investors, choose an EOS wallet that goes with your investment goals and objectives.
For long-term traders and investors who desire to hold their EOS tokens for months or even years, security is the primary concern. Such investors should consider hardware wallets that offer best-in-class security. Hackers and cybercriminals cannot get access easily to these wallets making them ideal for long-term EOS storage. Top EOS hardware wallets include Trezor, Ledger Nano X, and Ledger Nano S.
On the other hand, if you are someone who wants to trade EOS coins in the short run such as a day trader, then you want a combination of security and accessibility. That's where desktop and mobile wallets can be quite useful. They offer instant access to your tokens and have security features like encryption and two-factor authentication. The wallets are available for several operating systems including Windows, macOS, Android, and iOS. Some top EOS software wallets include Atomic Wallet, Exodus, Lumi Wallet, Guarda, and Scatter EOS Wallet.
When you just want to keep your EOS tokens for a few hours or a day, then hot wallets that are integrated into cryptocurrency exchanges and brokerage websites like Coinbase and eToro will get the job done. They are not the most secure wallets but offer instant access to your coins for quick trading. You can also acquire EOS tokens through P2P platforms that allow buyers and sellers to connect and negotiate their transaction terms. This way you can find the right price, payment mode, and the number of EOS coins you need.
Whatever platform you choose for trading or investing in EOS, keep in mind that majority of them comply with KYC and AML regulations to prevent frauds and illegal activities through their platform. While this takes away your anonymity and might be a bit of a hassle as well, it also ensures that you are trading on a platform where your personal information and funds are safe and secure.
Where Can You Invest In EOS?
To find the most suitable cryptocurrency exchanges and brokers, we conducted a thorough review of all popular platforms. We checked each essential feature including fees, ease of transactions, regulatory compliance, and more to shortlist our top recommendations.
When you make your trading account on a crypto platform, you will see there are a number of payment options including wire transfer, bank cards, and e-payment modes. These vary from one exchange to another and also depend on your country of residence. If you are just starting out, the best payment method for you is a credit or debit card. This may add transaction costs but it is immediate and convenient. You just need to enter your credit or debit card details such as the number on the card and PIN and you are good to go. Once you have deposited your minimum capital, you can purchase EOS.
There are some cryptocurrency exchanges and brokers that will allow you to deposit your capital directly through your bank account. Using this option is quite straightforward as well but it may take a couple of days for your deposit to show up in your account if it's an international transaction. You will need to choose your bank and fiat currency you want to trade-in. You will be taken to another web page where you will verify your account and then you will be granted permission to transfer your funds.
EOS Investment Strategies
For investing in EOS, you can find many short and long term investment and trading strategies. Here, we have laid out all the popular investment strategies and how and when you should implement them to earn profits on your EOS investment.
Buy and 'Hodl'
What is it?
When a frustrated crypto investor posted his rant on a forum, he mistakenly spelt 'hold' as 'hodl' which turned into an inside joke in the cryptocurrency space. This strategy is exactly what it sounds like. You hold your EOS coins for a long period until the price has reached a point where you can materialise big gains. Looking at the fact that within a short span of 2 years, EOS has acquired a ROI of 400%, we can assume that the 'hodl' strategy has worked pretty well for many investors.
How to use this strategy
To implement the 'hodl' investment strategy, you need to use a cryptocurrency exchange and not a broker. Sign up on the platform and verify your identity. Deposit your minimum seed capital and start investing. The real test of this particular strategy lies in your discipline and patience as an investor. There will be many occasions where you will be tempted to exit by selling your EOS coins but you will need to hold onto them if you are looking for potential long-term gains.
When to use this strategy
The perfect time when you should make your move is when the price of EOS tokens is witnessing a bearish trend. Buy EOS tokens with the capital you have and store them in a secure wallet until the moment comes when you can sell. Keep in mind that the cryptocurrency market is going to tempt you not once but many times but you must not allow it to sway. Don't get greedy when you see a price rally or get nervous when you see the price moving downwards. The idea behind the 'hodl' strategy is that whatever price does in the short term, you have to wait for the long run.
Buy EOS ETF/CFD
What is it?
Exchange-Traded Fund or ETF is a financial instrument that is traded on the conventional stock market. It contains a combination of assets including stocks and may include cryptocurrencies as well such as EOS. ETFs are often used by stockbrokers to manage their risk as they contain a wide range of promising assets for diversification. For those investors who don't want to concern themselves with the intricacies of cryptocurrencies and blockchains, financial instruments like ETF are a great investment opportunity
On the other hand, if you don't want to hold onto your EOS investment but simply want to bet on its price in the short-term, there is an instrument for that as well called Contract for Differences (CFDs). It allows you to buy a position on the said asset instead of purchasing it. If the price moves according to your prediction, you keep your profits and vice versa.
How to use this strategy
For obtaining financial instruments, you will have to sign up on a broker website and verify your identity. Some of the top brokerages include eToro and Plus500 where you can deal in crypto-financial instruments as well. Remember to validate your identity as it enables the brokerage platform to prevent any illegal or fraudulent activity on the website ensuring your trading and funds remain secure.
When to use this strategy
If you are someone who is more business or investment-oriented but does not want to delve into the details of how technologies work, then financial instruments are the best option for you to invest in EOS and other cryptocurrencies. If you own a cryptocurrency like EOS, you will have to manage wallets and ensure that your tokens remain safe. You will also be expected to learn about digital assets and blockchains which can be a complicated and time-consuming endeavour.
Long Position on EOS
What is it?
Long position refers to a trading strategy where you bet that the EOS price will rise in the coming hours or days. This is generally done through leveraged trading as it allows you to invest more capital than you actually have. Since you are confident in the price rise, it makes sense to leverage your position. However, you need to bear in mind that this isn't a suitable strategy for individuals who are just beginning to invest as it requires a deep understanding of cryptocurrencies and the financial market.
How to use this strategy
If you are confident that the EOS price will increase in the near future, you can open a long position on EOS by registering and verifying your account on a broker website. You will have to enter the sum you want to bet on your position along with the leverage which could be anywhere between 2X and 500X depending on the trading platform you are on. The broker website will also require you to mention the price you want to initiate your order at. Once that price is reached and continues to grow, you can close your position and keep the profits.
When to use this strategy
It cannot be stressed enough that long positions with leverage should only be used by highly informed and experienced traders who are aware of the ins and outs of the market. Moreover, the strategy is only viable in a bull market where the price is only going up owing to several factors. It takes a lot of skill and awareness to capitalise on such opportunities.
That's why if you want to make the most of your long positions, you need to learn about the market, blockchain technology, cryptocurrencies, and price volatility. You can learn all that through analyses, opinion leaders, and guidance material. Don't forget that the leveraged trade can go another way as well. In fact, the higher the leverage, the higher the chance of liquidation even with a minor price reduction. Always manage your risk and ensure that you are only investing what you can afford to lose.
Benefits of Investing in EOS
- Environment-Friendly – Just like Ripple, EOS is also pre-mined which means it is an environment-friendly token where professional miners don’t have the option to monopolise coin ownership through their commercial-grade equipment.
- Versatile Blockchain – EOS makes it much easier for developers to create a wide range of decentralized applications called dApps.
- Underlying OS – The network runs on EOS.IO which is just like Windows or macOS which makes it familiar to developers encouraging platform adoption.
- Accessibility – As your EOS coins are store in your secure wallet as digital code, the tokens are accessible to you as long as you have an internet connection and the device.
- Autonomy – EOS blockchain is completely decentralised which means no central authority has control over your funds.
- Anonymity – Buying EOS coins and trading on a blockchain ensures that hackers as well as other types of cybercriminals cannot find out your identity.
- P2P Investment – Relying on P2P websites, you have the option to buy and sell EOS coins directly from credible sellers that permit you to negotiate your own transaction terms including price and payment mode.
Disadvantages of Investing in EOS
- High price volatility – We all know how volatile cryptocurrency markets can be and EOS isn’t an exception. That’s why you need to exercise caution when investing in EOS.
- Beware of scams – Since the crypto trading and investment market is still in its early stage as compared to traditional financial markets that are more established, there is a wide range of scams and frauds in this space.
Other Ways of Investing in EOS
If you want an alternative way to invest in EOS, there are a few other options for you. One way is to directly meet with a seller face-to-face and negotiate your terms. Make sure that you are meeting at a safe location where you won't be at any risk. One more method to acquire EOS is through EOS ATM if there is one in your region. You can rely on the ATM Radar website to find out whether there are any legitimate EOS ATMs in your area.
Trade EOS on Leverage
Leveraged trading is for experienced traders and investors who can identify a bullish trend. It allows you to invest more than you have in your account by 'leveraging' your capital. The minimum leverage starts at 2X and can go up to 500X depending on the broker site you are trading on. You need to be extremely vigilant though as trivial price reductions can liquidate your account complete. The trading method is usually implemented through a brokerage website like eToro or Plus500.
Frequently Asked Questions
Long term investors should consider investing in a good hardware wallet. Leaving funds on an exchange is always risky.
Some of the top risk management strategies include investing in more than one promising digital assets, exiting when the market is at the peak, and only investing what you can afford to lose.
It totally depends on the country you live in. You will need to verify whether your country does so or not.
EOS cannot be mined. It has a supply of 1 billion tokens which are distributed based on the Proof of Stake protocol instead of the Proof of Work mechanism which is used by Bitcoin and Ethereum.
The services that enable EOS investment including crypto exchanges, peer-to-peer platforms, and brokerage websites often choose to comply with KYC and AML laws that enable them to prevent illegal and fraudulent financial activities on their website or app. This provides you with a healthy and safe trading and investment environment.