After a huge start to 2021, cryptocurrencies crashed in May. However, since the big drop, cryptocurrencies have been resilient and found some technical support. That’s leading traders to take a second look at other altcoins such as EOS (CCC:EOS-USD)
EOS was not spared from the crypto crash. Its price had hit $14 recently, but fell to $4 in the recent crypto carnage. However, EOS bounced sharply, and is now back up above the $6 mark, which is a large move off the lows. Why are folks giving EOS a second chance? Part of it is due to the broader recovery, to be sure, but EOS holds some specific appeal as well.
Peter Thiel’s Crypto
EOS has one of the best line-ups of celebrity investors involved. EOS is the token of Block.one, which is a blockchain software company. Peter Thiel, Alan Howard and Louis Bacon are all billionaires who are invested in Block.one. Bacon and Howard are both prominent hedge fund managers.
Thiel is the most prominent of the group, as he’s a famous Silicon Valley entrepreneur. He’s most known for co-founding PayPal (NASDAQ:PYPL) and Palantir (NYSE:PLTR) along with being the first outside investor in Facebook (NASDAQ:FB). When Thiel invests in something, good things tend to happen.
So Thiel’s involvement in Block.one is a promising sign. That’s particularly true given the recent success of Palantir. The artificial intelligence (AI) driven security software company had some questions when it went public. However, traders rapidly bid up PLTR stock, making it another big winner for Thiel. Given Palantir’s expertise in big data, crypto seems like another natural field for Thiel to explore.
Thiel is also on record as being a huge cryptocurrency bull. Palantir’s recent stock run-up has come in part because it is rumored to be making a major move in the crypto space. This could lead to some sort of benefit for EOS as well.
A Bullish Crypto Exchange
In May, Block.one made its huge announcement. The company is launching a crypto exchange, which it will call Bullish. The company is starting out with a massive $10 billion in digital assets (mainly Bitcoin) and cash to fund its operations. This should allow it to handle massive liquidity and trading volumes from day one. Block.one also intends to incorporate many features of decentralized finance (DeFi) on the exchange, giving users more ways to profit from cryptocurrency.
The key feature, as it pertains to EOS, is that the EOS token will power transactions on Bullish. Indeed, Block.one is putting 20 million EOS tokens into Bullish from the start to get operations under way. The company’s initial press release didn’t specify precisely how EOS will profit from activity on the exchange, however, presumably EOS token holders will prosper if the exchange takes off.
There had been chatter about the launch of a crypto-exchange for months before the company finally announced it. Even so, EOS’ price spiked 50% on the news, as investors were happy to see the dream finally turn into reality.
In investing, there’s the idea of betting on the jockey. In other words, instead of trying to pick which horse can run the fastest, go with the rider who can get the most of out their horse. With EOS, there’s a similar play at work. If you believe in Peter Thiel, it makes sense to take a look at his cryptocurrency.
Investors that bought into Palantir early have done well. While it remains to be seen which AI stock will ultimately be the champion of the space, Thiel’s renown and resources have helped give Palantir a big push. Crypto is a similarly fluid field right now. But with prominent supporters, EOS could emerge as one of the leaders in the space.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing…