Polkadot is currently the #11 largest cryptocurrency in the world. Although it narrowly misses the top 10 list, Polkadot’s $7.19 billion market cap places it among the major crypto leagues, just ahead of Dai, Polygon, and Shiba Inu, and just behind Dogecoin, Solana, and Cardano.
On September 22, Polkadot is trading at $6.42. The token has seen some turbulence lately, so making an accurate Polkadot price prediction is not an easy task.
Read: Do you want to diversify in a bear market? Consider these 6 alternative investments
The first step is to understand how the token got to where it is today and what its designers are working on going forward. Only then can investors begin making a Polkadot price prediction that can guide their decision to buy, sell, stake or pass.
Building Web 3.0: Polkadot and Parachains
The Web3 Foundation is a Swiss organization that funds research and development teams working to build the infrastructure that supports web3. His flagship project is Polkadot, which started in 2017 – one of his co-founders, Dr. Gavin Wood was also involved in founding Ethereum.
The project aims to create a new type of blockchain network consisting of custom-made, application-specific sub-chains called parachains, which is short for parallelized chains.
The creators of Polkadot define parachains as “advanced, next-generation Layer 1 blockchains that transcend the limitations of legacy networks. Specialized and interconnected, parachains form a diverse ecosystem of independent platforms, communities and economies that enhance the way we connect online.”
Polkadot promises a new kind of blockchain
Polkadot’s interconnected, purpose-built parachains all plug into a base platform called the Relay Chain. Developers can use Polkadot to create a custom blockchain made specifically for their app or service in minutes. Once their custom blockchain – or parachain – is connected to the Relay Chain, developers can securely communicate and operate with all other parachains on the Polkadot network.
Polkadot allows cross-blockchain transfer not just of tokens, but of any type of asset or data. Each chain manages itself independently but follows the same security protocols. This framework gives Polkadot scalability its developers say is unprecedented, keeps its fees low, and makes the network energy efficient.
DOT is the fat in the polkadot machine
DOT is Polkadot’s native token and is used to facilitate the platform’s essential functions. DOT serves three main purposes:
- Network Governance: DOT holders have complete control over the protocol, including managing exceptional events like bug fixes and upgrades, setting network fees, and determining auction dynamics and scheduling new chains. With traditional blockchains, this type of governance is the exclusive right of the miners.
- Mark out: DOT is the mechanism that allows game theory deployment to keep participants honest. Good actors get DOT and bad actors lose their credit.
- Connection: DOT enables a proof-of-stake system that binds tokens to form new parachains and removes bound tokens to remove non-useful or obsolete parachains.
Now that you know what it is, here are some Polkadot price predictions.
Polkadot Price Predictions
Like so many cryptocurrencies, DOT peaked in November 2021 when it surpassed $54. Like so many other digital tokens, it soon cratered and fell into the deep freeze state of the crypto winter that followed. It was below $40 before the end of the month, below $25 by Christmas, below $21 in late January 2022, and in the single digits through May. It remains below $7 today.
This development doesn’t bode well for DOT’s prospects over the next three years — but that development could change.
What will Polkadot be worth in 2022?
According to Daria Morgen, writing for crypto exchange Changelly, the industry consensus forecast that DOT would trade at $6.62 in September, which is pretty much the right level so far.
Analyst consensus sees the DOT higher to $7.23 by year-end in December — that’s a 19% ROI — and expects it to continue gaining momentum into the new year.
What will Polkadot be worth in 2023?
Changelly’s forecast for 2023 is that DOT will break into double digits and trade at a yearly average of $10.14, representing an 89% ROI.
What will Polkadot be worth in 2024?
The forecast for the following year in 2024 is that DOT will trade at an average of $15.11, representing a 178% ROI.
What will Polkadot be worth in 2025?
If Changelly’s interpretation of the industry consensus is correct, today’s investors holding out through 2025 will enjoy an impressive 289% gains as DOT trades at an average price of $22.39.
Will Polkadot Reach $100?
Changelly’s long-term Polkadot price prediction states that DOT will hit triple digits in 2029 when the token trades at an average of $103.73. However, with an investment as volatile as a cryptocurrency and a token as young as DOT, a specific seven-year forecast is hard to take with more than a grain of salt.
However, DOT traded above $54 less than a year ago, so $100 over seven years isn’t a particularly far-fetched forecast.
Can Polkadot reach $500?
Trading Education used forecasts from several top analysts to outline a possible path for the DOT price through the end of the decade. It is based on the premise that Polkadot and Ethereum will spend the 2020s in an intense and escalating rivalry that will ultimately determine the fate of both platforms’ native tokens, DOT and ETH.
If Polkadot emerges victorious from the race to build web3, Trading Education predicts that DOT will peak at $515.80 in 2030 — an 837.81% increase from DOT’s current high — before it settles down settles at a 365-day moving average of $499.91.
Again, there are so many variables, so many unknowns, and so much time between now and then that the rivalry-fueled fight for $500 by the end of the decade is little more than an educated guess.
Is Polkadot worth investing in?
An investment in DOT is an investment in the Polkadot network. Rather than relying on far-off price predictions, investors might be better off assessing their confidence in the concept of interconnected parachains as the building blocks of web3, the third iteration of the internet that is emerging.
It’s a complicated concept that requires extensive research, but anecdotally there’s evidence that at least some of Polkadot’s promises are being fulfilled.
A new staking protocol and frenetic developer activity fuel optimism
One of the most promising developments is the growing role of Polkadot in the DeFi space. On September 18th, a Polkadot parachain called Bifrost Finance tweeted some numbers that sparked 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 of Bitfrost’s vDOT holdings increased by 60% — all in one day plus six hours.
Bifrost is undoubtedly Polkadot’s golden child, but the chain is hardly alone when it comes to parachain progression. On the same day, Polkadot Insider tweeted that Polkadot developers absolutely crushed the competition and topped the charts of this week’s blockchain development activity.
Polkadot developers had counted 2,658.57, compared to 177.07 for #2 Ethereum and 99.07 for #3 Solana. Further 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 these types of platform dynamics rather than hypothetical long-term price predictions. Suzuki Shillsalot, writing for AMBCrypto, predicts that these developments will soon propel DOT back into double digits.
Don’t ignore the harsh headwinds Polkadot faces
Polkadot’s recent network successes are impressive, but resist the urge to invest in DOT if they’re wearing rose-colored glasses. The crypto winter has been brutal for everyone, but DOT has proven particularly vulnerable during the ongoing bear market.
On September 22, AMBCrypto reported an uncomfortable development that potential DOT investors should consider in their decisions. As the token fell to $6.25 on the day, it represented an ugly 12.5% weekly loss that AMBCrypto author Kanav Jain called “a big red alert for investors who spent most of the third quarter of the year have felt the heat of the market”.
Polkadot is an exciting and well-funded project brought to life by industry veterans who were cryptocurrency pioneers. It – and its native token DOT – has the potential to make web3’s promise a reality. But it’s not alone.
Before you invest in DOT, learn as much as you can about the Polkadot project — but also research its main competitors. According to Craft Data, this includes not only Ethereum, but also Cosmos Network, Wanchain and SKALE Labs.
If DOT is worth a look, their native tokens might as well.
Information is correct as of September 22, 2022 and is subject to change.
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