EOS Continues To Decline Post It Raised $ 4 Billion In 2017-2018

EOS Continues To Decline Post It Raised $ 4 Billion In 2017-2018

Cryptocurrency News
January 8, 2020 Editor's Desk
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In the time between June 2017 and 2018, Block.one raised $4 billion through the sales of its first cryptocurrency, EOS. More than a year later, the token connected with the Cayman Islands-based startup has lost over 30% of its value due to substantial price declines and a loss of authentic users. The EOS-to-dollar exchange rate
EOS

In the time between June 2017 and 2018, Block.one raised $4 billion through the sales of its first cryptocurrency, EOS. More than a year later, the token connected with the Cayman Islands-based startup has lost over 30% of its value due to substantial price declines and a loss of authentic users.

The EOS-to-dollar exchange rate recently sits at approx $2.79 after rising at $23.02 in April 2018. Like in the state of every other cryptocurrency, EOS, too, became a scapegoat of massive dumping that happened during the 2018’s so-called crypto winter. But unlike the benchmark cryptocurrency bitcoin, many smaller assets failed to recover a robust bullish price rally.

Opening 2020, EOS remains inside a firm downtrend. It is particularly harmful to a platform that was recognized as a vital player in the emerging blockchain sector. As WSJ looked back in 2018, projects like EOS have attracted thousands of developers and investors into developing decentralized applications, but they haven’t been able to lure users.

It is the same factor that is damaging the buying sentiment in the EOS market. Developers need to buy the tokens if they want to create dapps atop its blockchain. But the reduction of users leads those products to abandon, which, in turn, beat the demand for the cryptocurrency.

Investors who bought the first batches of EOS did not see the demand declining. More and more users joined the market during the crypto boom after reports symbolized a rise in dapp transactions on the EOS blockchain.

As it turned out, bot activity added to 75% of those reported transactions, published AnChain.AI, an AI-powered blockchain ecosystem security firm, in June of 2019. EOS investors also flagged because of allegations that the EOS blockchain remains pro-censorship and centralized.

The result of all this is an overhyped, underperforming startup incapable of accommodating users. Ever since its ICO, the EOS market cap has moved about 37% from its opening day valuation.

Matt Casto, an analyst at CMT Digital, said that underperforming tokens are transforming into vaporware projects that fail to produce the intended product.

“Only 33% of tokens that raised at least $50mn trade at a market cap greater than their ICO proceeds,” he tweeted on Tuesday. “The tokens that had less public awareness seemed to have printed massive ROIs relative to their ICO sale price but are now down +95% from those prices. IOTA is one that comes to my mind.”

Time will tell as to whether or not platforms like EOS will be able to tempt more users in the future. Still, shortly it remains a vital problem for the blockchain that is expected to continue hindering its price action.

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