After a strong April 2022, the price of DOT, the native cryptocurrency of the Polkadot blockchain, declined by over 50% to $11.22 on 16 May 2022.
Triggered by overall negative market sentiment that saw bitcoin (BTC), the number one cryptocurrency by market capitalisation, fall to $26,000 levels for the first time since 2020, the polkadot token has been also acting bearish.
What is polkadot coin?
Founded in 2016 by Ethereum co-founder Gavin Wood, the Polkadot network is one among many software competitors aiming to incentivise a global network of computers to operate a blockchain, on top of which users will be able to launch and operate their own blockchains.
The project is being developed by Web3 Foundation’s Parity Technologies, which focuses on the development of innovations that break down centralised online services and enable institutional innovation.
Unlike similar projects such as Ethereum, Cosmos and EEOSIO, Polkadot’s protocol connects a whole network of purpose-built blockchains, allowing them to seamlessly operate with one another, through its so-called parachains.
Polkadot allows for a number of transactions to be conducted at once and is easy and open for more innovations and collaborations due to its collaboration with other blockchain protocols.
Additionally, the network enables blockchains to upgrade without having to fork the chain, which used to take months and at times split the community.
The Polkadot network is powered by DOT, which has three leading purposes:
- Governance: DOT holders have complete control over the Polkadot protocol like deciding which events take place within the protocol (upgrades and fixes) through voting.
- Staking: through storing funds in a digital wallet, users can earn DOT tokens by running operations on the blockchain. There are four ways in which DOT holders can interact with the staking system.
- Bonding: DOT holders can block a certain number of tokens for a certain period of time.
DOT holders can become:
As of 16 May, the total supply of DOT coins stands at over 1.1 billion, with over 987 million tokens in circulation, according to data provided by CoinMarketCap. The cryptocurrency has a market cap surpassing $10bn, ranking it as the 11th biggest cryptocurrency.
Polkadot chart analysis: Does Polkadot have a future?
Polkadot launched in late August 2020 at $2.875. For the next six months, the DOT token price moved sideways before gaining some momentum in mid-January 2021. It jumped 187.4% since its launch to hit $8.2641 by 12 January 2021.
The token continued on a bullish trend, skyrocketing to $39.7 by 21 February 2021 – a 380% surge in a little over a month. However, positive sentiment did not last long as DOT dropped below the $32 mark in the next four days and continued to fluctuate between $33 and $38 for the entirety of March 2021.
By 14 May 2021, the DOT cryptocurrency surged to $47.95, a then all-time high, ahead of Polkadot’s launch of parachains – the network’s final launch in a series of multi-phase processes. On 23 May 2021, however, the token dipped by over 60% to $18.03 as Polkadot nodes failed with an out of memory error while trying to build a block. While the nodes themselves did not crash, their runtime did. It kept a bearish trend throughout the summer months, falling as low as $10.98 in mid-July.
The polkadot coin price started to resurface once again at the start of September 2021 following news that the crypto was planning the launch of its cross-consensus messaging format.
On 4 November 2021, DOT reached its all-time high, surging by over 390% since its July lows to $53.88, as the network announced the passing of referendum 42 in a community vote that would enable parachain registration and ‘crowdloans’.
The following day, Polkadot announced the passing of referendum 41 in a separate community vote, which saw the registration of its first parachain, keeping the polkadot token valued above $50 for the next few days.
A Polkadot technical analysis provided by CoinCodex showed the short-term sentiment for the token was largely bearish at the time of writing (16 May).
What is your sentiment on DOT/USD?
Following its November 2021 success, the token embarked on a bearish trend losing over 79% of its value since its all-time high and reaching $11.22 by 16 May 2022.
Is polkadot a good investment?
Recent DOT crypto news has seen the platform developing its parachain rollout stage, the final part of the Polkadot v1 launch process. As of 16 May 2021, the Polkadot community is on the final stage of voting to enable parachain functionality via a runtime upgrade. Once the vote is complete, parachains will be live on Polkadot and the network’s launch will be complete.
SmartBlocks and Fanatics Media fonder Mark Fidelman told Capital.com:
On 3 May 2022, cross-chain functionality went live on Polkadot which, according to BigOne Exchange chair in Asia Anndy Lian, “sets an example for interoperability and sets the tone for their network expansion of substrate-native assets and tokens”.
Future Polkadot upgrades include the development of the Cross-Chain Message Passing, which will allow parachains to exchange messages with other parachains. As well as the launch of parathreads, that temporarily participate in Polkadot security without needing to lease a dedicated parachain slot.
Following the recent crypto crash surrounding stablecoins, many investors are looking to turn towards more trustworthy cryptocurrencies. Media Coin LLC founder Jeff Freiberger told Capital.com:
Freiberger added that the DOT/USD future price had a lot of potential to resurface due to recent positive coverage around the cryptocurrency.
SmartBlocks’ Fidelman added that the token has potential to be better adopted by the wider market, however, it also runs several risks, like a failed mission to unite all blockchains in one.
Polkadot prediction 2022-2025, 2030
Despite the latest downward price action, algorithm-based forecasting service Wallet Investor gave a bullish DOT crypto price prediction at the time of writing (16 May). The site noted that DOT was “an awesome long-term investment”, adding that it has a long-term earning potential amounting to 348.53%.
Based on its analysis of past price performance, Wallet Investor expected that DOT could be valued at $20.549 in 2023. The polkadot long-term price prediction was expected to reach $50.379 by 2027.
DigitalCoinPrice supported the positive DOT coin price prediction but saw a much slower pace of growth in the following years, projecting that the polkadot 2022 value could grow to $14.62, reach $20.26 by the end of 2024 and jump to $25.48 in 2025.
By the end of 2028, the site predicted the DOT coin could reach $39.37. The price of polkadot in 2030 was projected to grow to $54.12.
Note that predictions about the future of DOT can be wrong. Forecasts and analyst expectations shouldn’t be used as a substitute for your own research. Always conduct your own due diligence and rely on your own projections. And never invest or trade money you cannot afford to lose.
Original Source: https://capital.com/polkadot-forecast-will-dot-price-rise
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.