EOS has largely underperformed during this crypto rally and dropped out of the top ten in terms of market cap, but an industry leader believes it could be one of the best risk / reward digital assets right now.
Chartered Financial Analyst and Arca CIO Jeff Dorman made the claim based on Block.one’s extensive Bitcoin holdings.
Before going into that, Dorman noted that EOS is the only major crypto asset, aside from XRP, which hasn’t made significant gains during this rally. In the past twelve months, EOS prices have fallen by 26%, with losses accelerating recently due to the resignation of CTO Dan Larimer.
But with numerous “zombie projects” ranging from 300% to 1,000%, he believes EOS offers a good opportunity / reward.
Block.one owns 140,000 BTC worth an estimated $ 5.5 billion at current prices according to data compiled by a financial comparison platform Bankr.nl. The CFA compared the market capitalization of EOS with that of its Bitcoin holdings;
“At $ 2.77, the market cap of $ EOS is $ 2.6 billion, which is just 47% of the value of their BTC holdings. That means that by buying $ EOS you are actually buying $ BTC for $ 18,771. Huge discount. “
Dorman stated that generating a Return On Investment, or ROI, from book value is essentially a gamble on what management will do with that capital. Block.one and the EOS teams have done very little to instill confidence, he added.
But Dorman suggested that at this point, EOS and Block.one CEO Brendan Blumer should create value for token holders, or return the capital, or expect massive litigation as soon as possible.
He concluded that each of these three options will unlock this value and close the gap between the market cap of EOS and the value of the Bitcoin on Block.one’s balance sheet, which is currently $ 1.5 billion more than the company retrieved in May 2018. ICO.
Not everyone agreed with the CFA, with one respondent pointing out that buying EOS is not the same as buying BTC;
“To be clear, you are NOT buying Bitcoin by buying EOS. Block One owns 10% of the EOS token supply. They update the eosio code. But EOS is a public blockchain. And B1 does not reward EOS token holders with their Bitcoin holdings. “
The sheer amount of Bitcoin on the Block.one books may give weight to Peter McCormack’s outspoken cryptopodcaster comment:
“EOS was nothing more than a Bitcoin heist.”
At time of writing, EOS was trading at $ 2.80, flat on the day and down almost 13% over the past week.