EOS Surges 30%, Becomes Fifth-Largest Cryptocurrency Ahead Of Incoming Token Airdrop

Francisco Memoria
  • EOS recently surged over 30 percent. The rally helped it become the fifth-largest cryptocurrency by market cap.
  • Behind the surge we identify an incomding token airdrop, and Bitmain's Antpool applying to become a Block Producer.

EOS, a blockchain-based platform used for the development of decentralized applications (DApps) is currently engaged in a bull-run that helped its price surge over 30 percent, ahead of an incoming token airdrop. The surge helped EOS become the fifth-largest cryptocurrency by market cap.

At press time, according to data from CryptoCompare,  EOS is up by roughly 31 percent in the last 24-hour period, as it is currently trading at $8.37, up from little under $6. This means the cryptocurrency now has a $6.5 billion market cap, larger than Litecoin’s $6.3 billion.

EOS.png

EOS’ rally coincided with a surge in trading volume. Available data shows EOS was the second most traded cryptocurrency, with its 24-hour volume exceeding $2.4 billion. Its volume is second only to that of bitcoin, which in the last 24-hour period had a trading volume of over $5.4 billion.

What triggered the surge is somewhat unclear. Its timing coincides with an incoming token airdrop, that’ll reward EOS holders with eosDAC tokens. On April 15 – the 300th day of the EOS initial coin offering (ICO) – every wallet with 100 EOS tokens will receive an equal amount of eosDAC tokens.

Those who don’t have 100 or more EOS tokens will be able to manually claim their airdropped eosDAC tokens later on, likely when the cryptocurrency’s mainnet launches later this year.

Others point out that Antpool, a cryptocurrency mining pool owned by mining hardware manufacturer Bitmain, is applying to be an EOS Block Producer (BP). To them, Antpool is artificially pumping the cryptocurrency’s price.

In its application to be an EOS Block Producer, Antpool wrote (roughly translated):

“EOS Community Ecology advocates “freedom, equality, and respect”. AntPool and EOS have similar values. We deeply understand the responsibilities and obligations in this regard, and care about the prosperity and sustainable development of the entire EOS community."

Antpool

Both potential causes seem unhealthy for the cryptocurrency’s long-term rise. While an artificial pump is bound to stop when Antpool decides it reached its goal, a pump caused by an incoming token airdrop might see the cryptocurrency plummet right after the blockchain snapshot.

As covered, this has happened in the past. Zclassic (ZCL) saw its price drop over 80 percent after the blockchain snapshot that created Bitcoin Private (BTCP).

Bitcoin Price Surges Above $9,300 for First Time Since June 25

On Monday (July 6), the Bitcoin price managed to surge past the $9,300 level for the first since June 25, a move that was likely powered by the current bullish in the stock markets of China and the United States.

Today's strong rally in the world's major stock markets started was led by China, where the Chinese government is apparently encouraging investors to buy stocks.

According to a report by CNBC, "a front page editorial in state-owned China Securities Journal" (publishe-d earlier today) talked about the “wealth effect of the capital markets” and suggested that a “healthy bull market" was important for the economy at this time.

Peter Boockvar, chief investment strategist at Bleakley Advisory Group, says:

"We have the Fed to juice bull markets, China has its state media."

The CSI 300, which is "a capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange", closed over 250 points higher at 4,670.09, up 5.67%. 

CSI 300 Chart by Google Finance on 6 July 2020.png

As you can see in the above chart from Google Finance, in the past five trading session, the CSI 300 index has gained over 13%, the most in a five-day period since December 2014, and helping the CSI 300 to reach a level last seen in June 2015.

CNBC says that although "China’s economy faces many hurdles, including trade issues with the U.S. and the growing friction as the economies move to decouple",  in the near term, "the prospect of an improving China spilled over to other markets, boosting sentiment for global trade."

Europe's major stock markets followed China's and all closed higher.

As for the U.S. stock market, premarket trading data indicated that the market would be having a good day, and it has not been wrong so far.

Currently (as of 18:37 UTC on July 6), the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq are at 26196.15 (up 368.79 or 1.43%), 3172.03 (up 42.02 or 1.34%), and 10404.81 (up 197.18 or .93%) respectively. The leading sector was (as usual) technology, with Amazon and Netflix setting new all-time highs, helping the tech-heavy Nasdaq to power itself to a new all-time high.

This is what President Trump tweeted around 10 minutes after the U.S. stock market opened:

Today's stock market rally in the U.S. means that the S&P 500 and the Nasdaq are both on a five-day winning streak. 

So, what's fuelling investors' perhaps surprising amount of bullishness on stocks in the midst of the COVID-19 pandemic? This might be especially mystifying in the case of the U.S., where we are seeing around 50,000 new daily cases of COVID-19 (even though, thankfully, the number of death are going down).

It seems that investors and traders believe that:

  • As lockdown measures are eased, the outlook for businesses should keep improving.
  • There are encouraging signs from the pharmaceutical industry that we will soon have good therapeutics in the next few months and reliable vaccines by next year.
  • Governments around the world will continue to support the financial markets with monetary and fiscal stimulus.

Andrew Brenner of National Alliance told CNBC:

"I’m starting to believe the Covid case are an inverse indicator. The worse it gets, the more the market does better because it means more Fed and fiscal stimulus will come towards the markets."

The optimism that is fuelling the stock market rally appears to be also helping Bitcoin since today Bitcoin shake off the lethary of the long Independence Day weekend -- which saw Bitcoin dropping below $9,000 at 21:15 UTC on Sunday (July 5) and bounce back above $9,300 for the first time in 11 days:

2 Week BTC-USD chart on 6 July 2020.png

Featured Image by "WorldSpectrum" via Pixabay.comSave