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Polkadot is currently the No. 11 biggest cryptocurrency in the world. Although it just misses the top 10 list, Polkadot’s $7.19 billion market cap puts it in the crypto big leagues, just ahead of dai, polygon and shiba inu and just behind dogecoin, solana and cardano.
As of Sept. 22, polkadot is trading at $6.42. The token has experienced some recent turmoil, so making an accurate polkadot price prediction is no easy feat.
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The first step is to understand how the token got to where it is today and what its designers are working toward in the future. Only then can investors begin making a polkadot price prediction that can steer their decision to buy, sell, stake or pass.
Building Web 3.0: Polkadot and Parachains
Web3 Foundation is a Swiss organization that funds R&D teams working to build the infrastructure that will support web3. Its flagship project is Polkadot, which launched in 2017 — one of its co-founders, Dr. Gavin Wood, was involved in the creation of Ethereum, too.
The project aims to create a new kind of blockchain network made from custom-built, application-specific subchains called parachains, which is short for parallelized chains.
Polkadot’s creators define parachains as “advanced, next-generation layer-1 blockchains that transcend the limitations of legacy networks. Specialized and interconnected, parachains make up a diverse ecosystem of independent platforms, communities, and economies improving the way we connect online.”
Polkadot Promises a New Kind of Blockchain
Polkadot’s interconnected, purpose-built parachains all plug into one base platform called the Relay Chain. Developers can use Polkadot to create a custom blockchain built specifically for their app or service in minutes. Once their custom-built blockchain — or parachain — connects to the Relay Chain, creators can securely communicate and operate with all the other parachains on the Polkadot network.
Polkadot enables the cross-blockchain transfer of not just tokens, but any kind of asset or data. Each chain governs itself independently, but follows the same security protocols. This framework gives Polkadot scalability that its creators call unprecedented, keeps its fees low and makes the network energy efficient.
DOT is the Grease in the Polkadot Machinery
DOT is Polkadot’s native token, and it’s used to facilitate the platform’s essential functions. DOT serves three primary purposes:
- Network governance: DOT holders have total control over the protocol, including managing exceptional events like fixes and upgrades, setting network fees and determining the auctioning dynamics and scheduling of new chains. With traditional blockchains, this kind of governance is the exclusive right of miners only.
- Staking: DOT is the mechanism that allows game theory staking to keep participants honest. Good actors receive DOT and bad actors lose their stake.
- Bonding: DOT facilitates a proof-of-stake system that bonds tokens to form new parachains and removes bonded tokens to remove non-useful or outdated parachains.
Now that you know what it is, here’s a look at some Polkadot price predictions.
Polkadot Price Predictions
Like so many cryptocurrencies, DOT reached its peak in November 2021 when it topped $54. Also like so many other digital tokens, it cratered soon after and fell into the deep freeze of the crypto winter that followed. It was under $40 before the month ended, under $25 by Christmas, under $21 by late January 2022 and into the single digits by May. It remains under $7 today.
That trajectory does not bode well for DOT’s prospects over the next three years — but that trajectory might be changing.
What Will Polkadot Be Worth in 2022?
According to Daria Morgen, writing for the crypto exchange Changelly, the industry consensus predicted that DOT would trade at $6.62 in September, which is pretty close to spot on so far.
Analyst consensus puts DOT higher, at $7.23, by year’s end in December — that’s an ROI of 19% — and expects it to keep gaining steam into the new year.
What Will Polkadot Be Worth in 2023?
Changelly’s projection for 2023 is that DOT will break into double-digits and trade at an average of $10.14 on the year for an ROI of 89%.
What Will Polkadot Be Worth in 2024?
The projection for the following year in 2024 is that DOT will trade at an average of $15.11 for an ROI of 178%.
What Will Polkadot Be Worth in 2025?
If Changelly’s read on the industry consensus is correct, today’s investors who hang on until 2025 will enjoy impressive gains of 289% when DOT trades at an average price of $22.39.
Will Polkadot Reach $100?
Changelly’s long-term polkadot price prediction is that DOT will reach triple digits in 2029 when the token will trade at an average of $103.73. However, with an investment as volatile as cryptocurrency, and a token as young as DOT, a specific seven-year prognostication is hard to take with more than a grain of salt.
That said, DOT was trading above $54 less than a year ago, so $100 over seven years is not a particularly far-fetched projection.
Can Polkadot Reach $500?
Trading Education used projections from several top analysts to outline a possible DOT price trajectory through the end of the decade. It’s based on the premise that Polkadot and Ethereum will spend the 2020s locked in an intense and escalating rivalry that will ultimately determine the fate of both platforms’ native tokens, DOT and ETH.
If Polkadot emerges as the winner of the race to build web3, Trading Education predicts that DOT will reach a high of $515.80 in 2030 — an 837.81% increase over DOT’s current high — before settling to a 365-day average of $499.91.
Here, too, there are so many variables, so many unknowns and so much time between now and then that the rivalry-fueled scramble to $500 by the end of the decade is little more than an educated guess.
Is It Worth Investing in Polkadot?
An investment in DOT is an investment in the Polkadot network. Instead of relying on far-off price predictions, investors might be better served by assessing their faith in the concept of interconnected parachains as the building blocks of web3, the third iteration of the internet that’s emerging right now.
It’s a complicated concept that requires significant research, but anecdotally, there is evidence that at least some of Polkadot’s promises are coming to fruition.
A New Staking Protocol and Frantic Developer Activity Stokes Optimism
One of the most promising developments is Polkadot’s expanding role in the DeFi space. On Sept. 18, a Polkadot parachain called Bifrost Finance tweeted some figures that stirred renewed interest in DOT. Polkadot’s new staking liquidity protocol, called vDOT, had minted 121,551 tokens in the first 30 hours after launch. With a TVM — total value of money — of $840,000, the combined APR on Bitfrost’s vDOT holdings was up 60% — all in one day plus six hours.
Bifrost is undoubtedly Polkadot’s golden child, but the chain is hardly alone in racking up parachain progress. That same day, Polkadot Insider tweeted that Polkadot developers had absolutely crushed the competition and topped that week’s charts of blockchain development activities.
Polkadot developers had tallied 2,658.57, compared to 177.07 for No. 2 Ethereum and 99.07 for No. 3 Solana. Farther back in Polkadot’s rearview mirror were Algorand, Bitcoin, Near, Avalanche, Tron, Fantom and BNB.
If you’re considering an investment in DOT, it should be based on that kind of platform momentum instead of on hypothetical long-term price projections. Suzuki Shillsalot, writing for AMBCrypto, predicts that these developments will soon push DOT back into double-digits.
Don’t Ignore the Stiff Headwinds That Polkadot is Facing
Polkadot’s recent network achievements are impressive, but resist the urge to invest in DOT wearing rose-colored glasses. The crypto winter has been brutal to all, but DOT has proved especially vulnerable during the ongoing bear market.
On Sept. 22, AMBCrypto reported on an unpleasant development that prospective DOT investors would be wise to factor into their decisions. When the token dropped to $6.25 that day, it represented an ugly 12.5% weekly loss, which AMBCrypto writer Kanav Jain called “a major red alarm for investors who have been feeling the heat of the market for most of Q3.”
Polkadot is an exciting and well-financed project launched by industry veterans who were cryptocurrency pioneers. It — and its native token DOT — has the potential to make the promise of web3 a reality. But it’s not alone.
Before investing in DOT, learn as much as you can about the Polkadot project — but also investigate its key competitors. According to Craft Data, those include not just Ethereum, but Cosmos Network, Wanchain and SKALE Labs.
If DOT is worth a look, their native tokens might be, as well.
Information is accurate as of Sept. 22, 2022, and is subject to change.
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