Why NEO Survived the Cryptocurrency Crash

All the top-ranking cryptocurrencies are getting butchered in the ongoing bloodbath. For investors, it’s absolute mayhem. But, despite the massive cryptocurrency crash, we’re staying true to our original NEO price forecast for 2018. Let me explain why.

The crypto world is seemingly heaving its last breaths. The figurative cryptocurrency bubble has finally burst. Investors have raised their hands and surrendered. There’s a mass exodus underway as fickle investors jump ship. Meanwhile, investors who continue to “hold on for dear life” (HODL) are losing sleep in worry.

Amid this chaos, owners of two specific cryptocurrencies may be enjoying sound sleep. Ethereum is one cryptocurrency weathering this storm well, and its Chinese equivalent, NEO, is faring better than all of the top-ranking cryptocurrencies.

NEO, dubbed “Chinese Ethereum,” is the only cryptocurrency among the top-ranking cryptos that has performed markedly well through the recent crash. This digital currency is up more than 50%, in spite of the broader market downtrend.




How exactly has NEO made this possible, you ask? It’s very simple. By marketing itself as the next Ethereum.

Chart courtesy of TradingView.com

NEO vs. Ethereum: Is NEO Really Better Than Ethereum?

Just as investors are watching Ethereum emerge as the only fundamentally strong cryptocurrency, they are beginning to seek other Ethereum-like investments.

NEO is one name that keeps popping up in their searches. NEO is turning heads because it is an Ethereum-alternative that could give the heavyweight a run for its money.

NEO is the fraternal twin of Ethereum. It is built for exactly the same purpose as Ethereum, but with a faster, more developer-friendly technology. Although I’d say that NEO is still in its initiation phase, markets have already begun to recognize its potential. This is why it is being valued on the same scale as Ethereum. I’ve done a more elaborate analysis of NEO vs. Ethereum here.

To understand NEO’s success, let’s first revisit Ethereum’s accomplishments. Ethereum is a blockchain platform for creating decentralized applications (DApps). Its unique moat is its ability to create demand for its cryptocoin “ether” from within the network.

Ethereum DApps, by default, require the use of ether for transactions. So, the more applications created on the platform, the more organic demand generated for ether. This is how its price has kept going up even through the crash. I’ve discussed Ethereum’s moat in greater detail here.

At this point, you may be getting muddled by questions like, “If NEO is just an Ethereum clone, why does China need it?” or, “Is NEO really better than Ethereum?” and “Can it survive competition in the long run?”

Those are legitimate concerns. Allow me to address them one by one.

Let’s begin with a reminder that China also has its own Amazon (Alibaba), it’s own Google (Baidu), its own Netflix (iQiyi), and the likes because the Asian country likes to preserve its individuality. The reality is, if China can’t create its own version of a Western technology, it copies it.

Virtually all of the Chinese substitutes to Western technologies are quite profitable, even though they are specific to the Chinese market. That’s because the country houses about a sixth of the world’s population. So NEO, even if it remains completely China-centric, still holds huge growth potential in the country of more than 1.3 billion people.

To answer the question of whether NEO is better than Ethereum, let’s discuss their two key distinguishing factors.

The first is that NEO pays a form of a dividend—a reward for owning NEO coins. Yes, you read that right. The dividend, called NEO GAS, is a crypto-coin that trades on exchanges. Ethereum, on the contrary, offers no such incentive.

Second, and more importantly, NEO’s technology is more developer-friendly. The platform supports multiple programming languages. Ethereum, by contrast, only supports one language, Solidity. This restricts many average developers from using the platform unless they learn the language.

In other words, if NEO and Ethereum had entered the market at the same time, NEO may have managed to attract more developers to its platform than did Ethereum. And, as I’ve identified above, the more applications a platform has, the more demand there will be for its coin.

Although NEO is late to the race, it can easily catch up with its rival because NEO promises to cater to a much bigger market. This is exactly why it may survive competitive pressures in the long run.

NEO Coin Potential: How High Can NEO Coin Go?

NEO is just beginning to reach out to the developer community outside of China. The founders held their first developers’ conference (DevCon) last week. Tickets to the NEO DevCon sold out, and the conference hall was jam-packed with enthusiasts. A number of developers were there to showcase their applications, while many more were there to learn about NEO.

The DevCon was held in San Francisco in the middle of Silicon Valley, allowing developers to rub shoulders with others on top of their game.

DevCons serve as good opportunities for developers to learn about a cryptocurrency’s underlying technology. Consider that Ethereum has already had three DevCons so far—all entirely successful—where developers put their heads together for future Ethereum projects.

The recently held NEO DevCon is expected to give this technology a push in the right direction. From where I see it, NEO is just warming up before it starts to fire on all cylinders.

Analyst Take

With participants fleeing in hordes, cryptocurrency prices are nosediving. Investors have been presented with a great opportunity to buy cryptos for cheap.

However, if there’s a lesson to learn from this fiasco, it’s that not all cryptos are worth doling out money for. Investors must ensure that the investment they are considering has fundamental value.

There is no question that Ethereum’s technology has emerged as the best blockchain bet out there. Any technology that is touted to surpass Ethereum could be a terrific investment choice.

NEO is a blockchain technology worth watching right now. The cryptocurrency may give early investors a once-in-a-lifetime opportunity to multiply their investments. Yet, investors must be warned that cryptocurrencies are acutely volatile. Thorough research is important before taking a big leap.

Nonetheless, we’re sticking to our NEO price forecast for 2018 with a price target of $200.00.