TRADE IDEA: EOS / ETH Spread Is Trading At Low End Of Upchannel

 7 of Top 10 most active dapps are built on EOS while only one is built on Ethereum
We Believe EOS Has The Better Financed Ecosystem and Fewer Challenges
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day

CRYPTO MOVERS AND PRICES

 

 

CRYPTO STORY OF THE DAY

The EOS / ETH Spread Is Trading At The Low End Of Its Upchannel - We Continue To Believe EOS Has The Better Financed Ecosystem, Fewer Challenges And Is Further Ahead In Its Development Timeline, Yet ETH's Market Cap Is 5x Larger - We Reiterate The Opportunity

We have frequently highlighted the EOS / ETH opportunity. Since the EOS launch, the EOS / ETH spread (chart) has made a series of 'higher highs' and 'higher lows.' However, since mid-April ETH has outperformed EOS by ~35%, bringing the spread to the lower end of its channel. This has occurred in spite of ETH having highly publicized capacity issues recently with transaction costs being pushed higher. EOS, of course, does not have such transaction costs.

Crypto Takeaway: When one does an analysis of these two networks, EOS is ahead in almost every key vertical. The blockchain is already proof of stake whereas Ethereum has long discussed transitioning to PoS. Furthermore, when EOS-associated Block.one raised capital in 2018 they converted almost all funds raised into fiat while Ethereum remains financed primarily by dwindling ETH reserves of the founders (in turn making them forced sellers).

Furthermore, according to dappRadar 7 of the Top 10 most active dapps are built on EOS while only one is built on Ethereum. The recent capacity issues, of which there does not seem to be a near term fix, only makes it less likely that Ethereum will greatly broaden its suite of active dapps. While the network does have a loyal following and a well-known brand, a USD 20B market cap for ETH versus a USD 3.8B cap for EOS appears exaggerated.

 

About the Author

FRNT Financial is an Institutional Brokerage which offers clients a variety of products along with research & analytics in the crypto-space.