Thursday, June 14, 2018

TokenReporter: How EOS drove the markets

Welcome back to a special edition of TokenReporter. This time we have a guest column on EOS and price inflation from trader Chris Cannon. His takes on the inside of the token market are incredible and I think you’ll enjoy this one.

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Today, cryptocurrencies' total market capitalization sits at around $270 billion.  That's just one third of the market's all time high of $827 billion, recorded on January 7, 2018.  It can be a bit dizzying trying to understand why the market has fallen so far so fast.  Tech media sources suggested this week that a 13% drop over the weekend of June 9 was due to a hack against Coinrail customers.  Security remains a key issue to cryptocurrency adoption, but the attack against Coinrail - then the 90th largest exchange by volume - likely did not cause the drop.  Coinrail customers lost $40 million, while the weekend market drop was over $46 billion.  Over the past 6 months, market drops - and more importantly, market spikes - are better explained by examining a single token, EOS.

Even casual cryptocurrency watchers became familiar with EOS after the project was featured on John Oliver's "Last Week Tonight" on March 12.  After the show, EOS price dipped initially before rallying the next week, proving what PT Barnum once observed - there is no such thing as bad publicity.  Regardless, viewers would have been better served if the episode had focused less on EOS's eccentric (and now former) frontman Brock Pierce.  Instead, John Oliver should have highlighted the project's successful CTO Dan Larimer, the brains behind both Steem and BitShares (33rd and 35th in marketcap as of today).

EOS is not just a good story, it has been a market front-runner a year in the making.  Participants on day 0 of the EOS ICO last July received tokens for just $0.86 by swapping ETH.  The unconventional ICO stretched over a year (350 23-hour periods to be exact), but EOS really began to take off in December, leading the rest of the market.  BTC famously broke around $10,000 on December 1 and surged to an all time high around $19,000 on December 17.  While EOS was modestly priced at $2.77 on December 1, it actually outperformed BTC by over 50% during that 17 day runup.

EOS is doing even better this year, up over 150% year-to-date compared to BTC.  This is even after taking into account EOS's 30% drop the past five days.  How is EOS doing this?  By relentlessly delivering on the technical merits of the project. 

By most metrics, EOS is the most highly contributed blockchain project on GitHub.  EOS technical milestones are frequently hit on time and also frequently lead an overall crypto market run-up.  EOS delivered their Dawn 2.0 release on February 9 and the token saw a 21% rise in a week.  The market bounce started on February 14 and was up $57 billion or 13% over the following 7 days.  Dawn 3.0 was released on April 5 and a week later on April 12, EOS had risen 54%.  April 12 was a banner day for the broad market, surging $50 billion or over 18% that day alone.  The crypto market hype actually preceded Dawn 4.0, released May 4. 

EOS was already at an all-time high of $21.05 by April 29, a 82% increase over the previous week.  The week after April 29, the overall crypto market rose another 9%, reaching $465 billion on May 5.

The market's last rise coincided with the ICO ending on June 1. 

EOS surged 23% over just that weekend.  The market drop this week is likely most strongly related to the perceived uncertainty regarding the EOS Mainnet launch.  The EOS blockchain launch is a multi-phase, multi-vote process that was thought to have been completed over 2 days but has stretched out over 2 weeks.  The blockchain won't officially launch until 15% of the total EOS supply has voted for block producers.  This last stage in the process started on June 10 and initially only about 1% of the vote was being recorded per day.  But voting has accelerated the past few days.  As of early June 14, about 10% of the required 15% of total votes have been cast.  At this rate, the EOS Mainnet launch should complete late Friday, which will be good news for EOS producers, Dapp developers, and token holders.


If past milestones are any indication, it should be good news for the broader cryptocurrency market as well.