Is Polkadot (DOT) a Good Buy?
Is Polkadot a good investment?
Well, Polkadot (DOT) has had a wildly successful year, and the crypto market is convinced that it has an even more promising future, which makes it a good investment. Polkadot is still considered to be a relatively new cryptocurrency that is still under development and with a huge potential for growth in the future.
The fact that it has already become a crypto investor favourite has unlimited potential for growth and is still lowly priced makes it a good buy to speculative investors.
Since you are here, we want to assume that you are looking to invest in Polkadot. But you still want to get a better understanding of the altcoin before making the purchase. Let us go over everything you need to know about the DOT tokens to help you make this all-important decision.
What you need to know about Polkadot
For starters, Polkadot has only been around for 11 months. And so far, DOT has turned a net positive ROI, made it to the list of the fastest-growing blockchains and cryptocurrencies in 2021, and rose to position 9 on CoinMarketCap’s list of the largest cryptocurrencies. It has also entered into key partnerships with both blockchains and DeFi protocols who are already building or looking to build programs on the Polkadot blockchain.
Polkadot prices have also been on an uptrend and rallied for the better part of 2021. From a listing price of $2.69 on 20th August 2020, DOT token prices increased by 1800%+ in the first nine months of its launch to set an all-time high of $49.69 on 15th May 2021.
Today, even after the May 2021 market crash that has most cryptocurrencies trading at a dip, DOT token still manages an overall ROI of 400%+. Moving forward, crypto analysts are convinced that the coin will sustain this uptrend and possibly break above $100 in the next few years.
But what is Polkadot? What could it be worth over the few years? And more importantly, how much should you invest in Polkadot? We discuss all these below. Read on.
What is Polkadot (DOT)?
Polkadot is a next-generation blockchain that provides a communication and data-sharing medium between two or more blockchain technologies. It is designed with the hope of achieving interoperability for the blockchain world where one network can share data with another seamlessly and in real-time. Additionally, Polkadot presents crypto enthusiasts with a platform for customizing a blockchain in minutes and link it with other blockchain technologies for data sharing.
It was created by Parity Technologies - a company founded by Ethereum co-founder Gavin Wood. To a large extent, Polkadot wants to solve the scalability and high gas fee challenge facing Ethereum and the larger data sharing problem facing the entire blockchain industry.
The disruptive nature of blockchain technology has earned it the nickname “Ethereum Killer”, as it provides the crypto community with everything Ethereum has to offer and more. And the tag is confirmed by the fact that Polkadot has been growing at a faster rate than Ethereum. In the last 12 months, its blockchain developer pool grew faster than Ethereum or all other perceived “Ethereum Killers.”
But the growth and revolutionary technology appeal notwithstanding, you still want to know if Polkadot is a good investment.
Is Polkadot (DOT) a Good Investment?
A deep analysis of the Polkadot blockchain gives so many hints that the DOT token is a good investment and the ultimate must-have for a serious crypto investor. For instance, it has already been named one of the fastest-growing altcoins in 2020. It has also become a hot topic within the crypto community, which drives more eyeballs to its technology and helps bring in more users - effectively created the demand needed to push DOT prices up.
But the key fundamentals that make us believe that the Polkadot token is a good buy today include:
- Bullish trader sentiments: Trader sentiment analysis tools are strongly bullish about Polkadot’s future price action. This implies that DOT token investors and the crypto community are convinced that Polkadot token will have a bright future - possibly report unprecedented price growth. And this makes the altcoin a good investment.
- Analysts point to a sustained uptrend: Reputable analysts and price prediction websites are convinced that Polkadot token prices will continue rising in the foreseeable future. Most are especially confident that DOT token prices will reach $100 over the next few years and set aim for $500 by the turn of the decade, which would mean massive profitability for current investors.
- Low prices: Weighing Polkadot’s disruptive technology and potential for future growth against its current prices, most analysts are short of saying that the token is undervalued. Currently, DOT is trading around $14.50 with a market cap of $14.5 Billion despite being more scalable and having more possible use cases than Ethereum, which is trading close to $2000 and has a market cap of $250 Billion. This has investors and crypto market watchers convinced that Polkadot could only go up from here.
- Sustainable technology: There is fear that a possible ETH 2.0 upgrade will render most “Ethereum Killer” blockchains useless. But this is not the case for Polkadot because it offers more than scalability. It is cementing its position as the blockchain for other blockchains by providing an interlink through which all blockchains can share data. This and the fact it will still be more scalable than the proposed ETH 2.0 foolproofs its future and offers an additional reason why it is a good buy.
How Much Should I Invest in Polkadot (DOT)?
There is no standard rule on the minimum or maximum amounts that you can invest in Polkadot. Rather, how much you invest in Polkadot should be dependent on such factors as your investment goals, crypto trading experience, and your disposable income.
Here is an example: let us assume that your thorough research on Polkadot indicates that the altcoin will have appreciated by 2000% to reach $300 in the next 5 years. And your goal is to earn $1 million from your DOT investment by then. This implies that you would need to invest $50,000 in DOT tokens today.
Note, however, that not even the most thorough crypto research is foolproof. Polkadot, like virtually all other cryptocurrencies, is highly volatile and unpredictable. There are so many factors acting on Polkadot token prices and the crypto market in general, which makes it almost impossible to tell what the altcoin will be worth the next day - let alone 5 years to come.
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How Much Could Polkadot (DOT) Be Worth?
Crypto analysts are convinced that Polkadot prices will rise again and sustain that uptrend over the next few years. They are convinced that it will break above the current all-time high soon and probably aim for $100 in the next few years.
At the height of the early 2021 price rally, however, CoinPriceForecast had indicated that Polkadot DOT token prices would reach $102 by the end of the year, $181 by the end of 2022, and break above $200 before the end of 2023.
Today, analysts are still optimistic about DOT token’s future though a tad low on the price levels they expect the altcoin will reach.
Technical analysis by Wallet Investor, for instance, estimates that the Polkadot token will be trading around $56 by this time next year and grow its current price by 1380% to reach $215 in the next five years.
Crypto experts at Coinpedia, on the other hand, expect the Polkadot altcoin to almost double its price in the next five months and end the year trading around $27 before extending this to about $126 over the next 5 years.
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Should You Invest in Polkadot (DOT)?
There are more than a handful of reasons why you should consider investing in Polkadot today. These range from the fact that the Polkadot token has a net positive ROI, analysis by both experts and price forecasting websites points to a bright DOT future, and the hugely bullish sentiments from current DOT investors and the crypto community.
There are also subtle opinions that Polkadot could be massively undervalued and ripe for an underground price correction. Some experts are even convinced that the altcoin has what it takes to reach $100 and possibly threaten Ethereum’s dominance as the second-largest cryptocurrency. And all these give traders even more reasons to invest in Polkadot.
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- Polkadot is one of the fastest-growing blockchains and cryptocurrencies, with an overall ROI of 400%.
- Crypto experts estimate that Polkadot prices will rise again and probably reach $100 in the next 5 years.
- Some of the factors that convince analysts that Polkadot is a good buy include the fact that its impressive past performance, its highly promising future, its sustainable and highly competitive multi-chain technology, and the fact that it is lowly priced.
- Polkadot is a good buy, especially for long-term investors.