CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
Bearing some similarities to Ethereum, NEO is a platform rather than a simple cryptocurrency, designed to be used universally to pay for goods and services. NEO is often referred to as the ‘Chinese Ethereum’ and is positioned as a ‘public cloud’ with its core functionality being the building of smart contracts and decentralised applications.
NEO was originally called Antshares at its launch in 2016 before being re-branded as NEO in 2017. The re-brand also involved developments in functionality and the platform’s smart contract code, designed to support decentralised commerce, digital identities and the digitalisation of a wide range of different asset classes.
NEO is described as “… building a financial system bridging the real-world assets,”. Within 2 months of its re-brand, it climbed into the top 10 cryptocurrencies by market capitalisation. Perhaps unsurprisingly as NEO has the weight of the Chinese government behind it, it has seen one the fastest rate of adoption and traction rates to date. This has been reflected in its price rise from $0.18 per NEO unit at launch in early September to over $150 in 2018.
One major difference between NEO and Ethereum is that development done on the Ethereum platform needs to be done using the platform’s own native programming language – Solidity. This mean Ethereum developers have to learn a whole new coding language. Developers building on the NEO platform can use JAVA and other common coding languages. This means NEO has a lower barrier to entry than Ethereum for devlopers.
NEO cryptocurrency units are used to pay for the creation and use of smart contracts and the other digitalised assets and decentralised applications that can be built on the NEO platform.
When buying cryptocurrencies with a view to speculating on their price trajectory, rather than using them to pay for products and services, two choices are available. One is to buy actual units of the cryptocurrency, whether NEO, Ether, bitcoin or another, and to hold them, with a view to hopefully sell them at a profit at a later date if their price rises. Doing so means setting up an online cryptocurrency wallet from a provider that supports the cryptocurrency you want to buy.
An account with an online exchange that supports a trader’s favoured cryptocurrency(s) must also be opened. The cryptocurrency units are bought on the exchange and then transferred to the wallet, which can either be online, or offline as an extra layer of security to prevent the risk of theft by hackers. The reverse process will be required to sell.
Another option is to instead use CFDs, a financial derivative whose price is based on that of the underlying cryptocurrency. This can be easier and allows traders to take a short position, meaning that the trader can benefits if the price of the underlying asset goes down as well, or for shorter term positions on the price movement of up to a few days.
CFD brokers also allow the trader to use leverage, which multiplies profits, or losses, compared to the funds allocated to open the position. This does, however, increase a trader’s exposure to risk – the higher the leverage, the higher the risk.
If using CFDs to trade NEO, it is important to choose a regulated online broker. There is a wide choice of online CFDs brokers available, many of whom are regulated and many which are not. Using a regulated broker means client funds are protected in segregated accounts and in the worst case scenario of the broker running into financial difficulties this should not affect the balance in a client’s trading account. Even if money were to be lost, much of it would be subsequently compensated by the regulatory system, depending on the jurisdiction and regulator.
Another advantage of regulated brokers is that their price quotes and general business operations are supervised by the regulatory regime, for example, the Financial Conduct Authority in the UK, you can see a list of FCA regulated brokers here.
The main influence on the value of cryptocurrencies is their rate of adoption. How many people and other entities are holding, trading and spending a cryptocurrency impacts demand, and also sentiment on the future of the particular cryptocurrency. Unlike fiat currencies, whose value can be impacted by the monetary policy of the central bank that issues the currency, the national economy, international demand and geo-political events, cryptocurrencies are not tied to any particular economy or central authority.
The value of NEO units is and will be defined by how many users are building and using smart contracts and other digital assets on the platform.
Launch date: September 2016, rebranded as NEO in September 2017
Launch value: $0.18 (as Antcoins)
Lowest and highest levels to date: NEOs (still called Antcoins at the time) hit $48 in August as hype built around the re-branding of the Antshare platform as NEO. When first launched as Antcoins in September 2016, NEOs were valued at as little as $0.18.
Daily exchange volume (as of 26 1st 2018): $274,340,000
First brokers to offer NEO trading: Avatrade and Plus500 are among the first regulated CFDs brokers to offer NEO trading