EOS/JPY: What to consider before trading this pair

While the USD and Bitcoin are considered the major currencies of the fiat and cryptocurrency worlds, respectively, mixing and matching other crypto/fiat pairs presents many new options for traders and investors. As part of our ever-expanding offering of financial instruments and crypto assets, we at eToro are now launching another interesting crypto/fiat pair, which pins the EOS token against the Japanese Yen.

The base cryptocurrency, EOS, is the token used on the EOS.IO blockchain, which was developed by Hong Kong-based startup company block.one. The company set out to create an intuitive blockchain system that will enable developers to harness the power of the technology for creating their own blockchain-based software. The quote currency is the Japanese Yen. Essentially, the numeric value of this pair represents the price of one EOS token in Yen.

Therefore, traders and investors interested in this instrument need to decide whether they believe the Yen will go up in value against EOS, or whether the cryptocurrency will rise against the Japanese currency. Those who favour EOS can open a long (BUY) position on EOS JPY, and those who believe the opposite should consider opening a short (SELL) position.

65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

This is not investment advice.

EOS: A fast rise to power

Despite being designed to serve as the currency that runs the EOS.IO operating system, EOS was actually introduced before the system was made available. Initially, block.one sold the EOS token using a platform built on the Ethereum network, offering it to early backers via a year-long Initial Coin Offering (ICO). To date, the EOS ICO was the largest in the short history of the cryptocurrency realm, raising a whopping $4 billion. The amount raised positioned EOS as one of the largest cryptos in the world by market cap, surpassing the likes of Litecoin and Cardano in the process.

Following the successful ICO, EOS started preparing for the launch of its operating system. Ahead of the launch, block.one migrated all of its tokens from the Ethereum blockchain to the EOS.IO system. During the migration, EOS trading was frozen on most platforms, (eToro included). However, once the transfer was complete, trading resumed, and the EOS token kept its place as a top 10 crypto. EOS is one of the more volatile altcoins, often showing significant price swings over the course of a single day.

The Asian connection

The cryptocurrency space is very much in touch with the Asian market. In fact, it is estimated that some 75% of all Bitcoin mining activity takes place in China. Therefore, it is no wonder that several other cryptos have emerged in the East. NEO is a prime example, it has been described as “the next Ethereum” and has been able to mould itself to fit the strict regulations imposed by the Chinese government during the recent crypto crackdown.

EOS is also based in Asia, operating out of Hong Kong. Therefore, it is in proximity to the biggest crypto market in the world. Moreover, Hong Kong is one of the most influential financial hubs in the world, and the fact that block.one is based there gives it a unique advantage over some other cryptocurrencies.

Japan is no different than other Asian countries when it comes to the regulation of cryptocurrencies. Since it is a highly developed economy, it is already placing great emphasis on the regulation of cryptocurrencies and the understanding of how blockchain could fit into its economy. The Japanese Yen is in frequent use within the crypto space, a fact which makes pairing it with an Asian cryptocurrency quite natural.

How to trade EOS JPY on eToro

As the cryptocurrency space becomes more closely connected to mainstream markets, the number of financial instruments which combine it with another market will most likely grow. Since cryptocurrencies were created as an alternative to fiat currencies, it is no surprise that the first such instruments introduced combine the two markets. The EOSJPY pair is one of many crypto/fiat pairs available on the eToro platform, enabling traders and investors to explore new aspects of the way these two markets interact and impact each other.

65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

This is not investment advice.