Key Takeaways

• The Polkadot blockchain and its DOT coin suffered during the second quarter of 2023, with most of its key metrics down. 
• The platform has announced that it was starting work on its next stage of development, known as Polkadot 2.0.
• Polkadot has not said what this upgrade will involve. 

Polkadot has gone through a tough few months. Although the United States Securities and Exchange Commission (SEC) does not consider it to be an unregistered security, it was hit badly by the news that the SEC was suing the Binance and Coinbase crypto exchanges.

Over the second quarter of 2023, most of the system’s metrics declined on both a yearly and quarterly basis.

However, there has been some encouraging news since. The network, which allows people to create their own blockchains, announced  that Polkadot 1.0 was completed and the stage was set for Polkadot 2.0.

The news was tempered somewhat by the fact that it was not made entirely clear what Polkadot 2.0 would involve. The blockchain’s co-founder, Gavin Wood, suggested  that it might involve allowing people to pay for the time they used, rather than the technology they were using itself. 

The announcement has seen the platform’s DOT coin gain a bit of traction and it has recovered from a low it hit in June.

But what is Polkadot (DOT)? How does Polkadot work? Let’s see what we can find out, and also take a look at some of the Polkadot Price Predictions that were being made as of July 31 2023.

From the Whitepaper

Polkadot has two pieces of technical documentation. It has a detailed one, or whitepaper , and it has a more accessible one, called a lightpaper . They both say that Polkadot is designed to allow data to be transferred between blockchains.

The lightpaper says: “By bringing together the best features from multiple specialized blockchains, Polkadot paves the way for new decentralized marketplaces to emerge, offering fairer ways to access services through a variety of apps and providers.”

Advantages and Disadvantages of Polkadot 

Blockchain analytics company Messari recently released its quarterly report on the Polkadot coin . It highlighted that the way Polkadot was able to offset having fewer people staking DOT by increasing rewards for staking, and outlined some key advantages and disadvantages of the blockchain.

It said that, between the start of April and the end of June 2023, Polkadot had

• A market cap of $6.24 billion, down year-on-year from $7.89 billion and quarter-on-quarter from $7.74 billion.
• Total revenue of $81,350, down year-on-year from $217,670 and quarter-on-quarter from $120,350.
• An average of 5,810 active daily accounts, down year-on-year from 7,180 and quarter-on-quarter from 6,920.
• 1,370 new accounts per day, down year-on-year from 2,240 and quarter-on-quarter from 1,690.

Advantages of Polkadot

Messari said that Polkadot

• Implemented the OpenGov governance method well.
• Had one of the largest developer bases of any blockchain.
• Made “significant progress” on implementing proposed changes.

Disadvantages of Polkadot

Messari also said that Polkadot

• Had suffered following the SEC’s legal action.
• Earned less revenue than its competitors because of the way the system was designed.
• Only had one new parachain in the quarter, the Moonsama NFT marketplace.

 

With Messari’s report being broadly positive about Polkadot, what does this mean about the DOT price prediction?

First, though, let’s talk about what the Polkadot  coin actually is.

Polkadot (DOT) Explained

If the blockchain is king in the world of crypto, then it pretty much makes sense that someone might want to build their own blockchain. If a cryptocurrency has its own blockchain, it means that it is a coin, not a token, giving it a bit more credibility in some investors eyes. Not only that, but running a blockchain can give developers more control over their platform. 

Polkadot  is a platform that allows people to pretty much build their own blockchains. The system was set up in 2016 by Ethereum (ETH) co-founder Gavin Wood, blockchain researcher Robert Habermeier and technology director Peter Czaban.

The system itself is supported by the conveniently-named Polkadot (DOT) coin.

How Polkadot Works

The Polkadot blockchain is, basically, two types blockchains in one. The main chain is called the relay chain and transactions are permanent there. The other sort of chains are parachains, which are the networks set up by Polkadot’s users. 

Polkadot can handle more than one transaction at the same time. This means, at least in theory, that it is quicker and, by extension, cheaper, than some of its rivals. 

The blockchain uses a form of the Proof-of-Stake (PoS) consensus mechanism called Nominated Proof-of-Stake (NPoS) to secure the network and add blocks to the blockchain. In NPoS, people who hold DOT can stake the coin in order to add blocks, but they can also nominate other people to serve as validators.

There are three different sorts of DOT holders on the blockchain. Validators run the computers, or nodes, which help the system run. Nominators help nominate validators and get a portion of the DOT the node runners earn, while Collators monitor transactions on the parachains and report them to validators.

People who hold DOT can also vote on how Polkadot is run, and the coin can also be bought, sold, and traded on exchanges. 

DOT Price History

Let’s now take a look at some of the highlights and lowlights of the Polkadot price history . While past performance should never be taken as an indicator of future results, knowing what the coin has done can help give us some very useful context when it comes to either making or interpreting a Polkadot price prediction. 

Although DOT has been around in one form or another since May 2020, for the purposes of clarity we will pick up the story of DOT in August that year, when the coin was redenominated. This meant that, although its value deliberately fell by one-hundredth, there were also 100 times more DOT put into circulation, with holders rewarded proportionally. This meant no one end up out of pocket.

Anyway, when DOT’s current incarnation launched in August 2020, it was worth about $2.80. It hovered around that level for a while, but picked up pace in early 2021, when it shot up to a periodic high of $47.95. Although it fell dangerously close to $10 over the summer, it recovered in the autumn, reaching an all-time high of $55 on  November 4, before it collapsed, closing the year at $26.72. 

The last few weeks of 2021 were a preview for the horrors of 2022, when DOT, along with most of the rest of the crypto market, suffered through a series of market crashes. On December 31 last year, Polkadot was worth $4.31, representing a year-on-year loss of more than 80%.

So far, 2023 has not exactly ended up being a great return to form. Although a bullish market early on in the year saw the coin reach a high of $7.83 on February 19, things then declined. The worst point came on 15 June, after the market crashed in the wake of the United States Securities and Exchange Commission (SEC) announced it was suing the Binance and Coinbase crypto exchanges. That day, DOT was worth just $4.28. 

Polkadot has made something of a comeback, reaching a high of $5.67 on July 14. Although it fell nearly 10% to $5.13 on 18 July, the announcement of the completion of Polkadot 1.0 saw it make a recovery and, on July 21 2023, DOT was worth $5.68. Since then, it has fallen and, on July 31 2023, it was worth about $5.20.

At that time, there were 1.2 billion DOT in circulation out of a total supply of 1.3 billion. This gave the coin a market cap of around $6.6 billion, making it the 13th-largest crypto by that metric. 

Polkadot Price Analysis

DOT’s price has been a little bit up and down in recent weeks. Although it is worth more than 20% than its June low, it has dropped more than 8% in 10 days. 

More encouragingly, it is up by 20% since the start of the year. 

The price of Polkadot reached an all-time high $55 on November 4, 2021. Following that, it dropped to a low of $4.23 on December 29.

DOT recovered by nearly 85% between the start of the new year and 19 February, when it reached $7.83. 

However, it then declined and was trading at very close to its late December low on July 10. There was a recovery to $5.23 on June 25, but since then it has stagnated somewhat.

It is possible that DOT’s bear cycle ended in late December but, with the trend line dropping since February, to drop, this has not been confirmed yet.

Since July 10, the price of DOT has risen. If we go by the contested theory that price movements happen in five waves, then we could be in a third wave of an upward trend. 

It is possible that, by the time we reach the end of the wave, Polkadot could be worth $10.

This would also suggest that the low on July 10 was the bottom of the second wave. If that is the case, then if DOT manages to avoid falling below about $4.70, then that would suggest that it can continue to maintain momentum.

If that is the case, then, by the time it gets to the peak of its fifth wave, it could be worth about $15.

Polkadot Coin Price Prediction 

With that all out of the way, let’s take a look at some of the Polkadot price predictions that were being made as of July 31 2023. It is important to remember that price forecasts, especially for something as potentially volatile as crypto, very often end up being wrong. Also, keep in mind that many longer-term crypto price predictions are made using an algorithm, which means that they can change at a moment’s notice. 

First, CoinCodex  had a short-term Polkadot price prediction which said things would get worse before they got better. It forecast the coin to drop to $4.86 by August 4 before climbing back to $5.77 on August 19. The site’s technical analysis was highly bearish, with 24 indicators making discouraging signals and just three sending bullish ones. 

Polkadot Forecast for 2023

When it came to other sites making a Polkadot price prediction for 2023, DigitalCoinPrice  was extremely optimistic, saying it would trade at $10.70. CaptainAltCoin  thought DOT would drop to $3.89 in October before closing the year at $4.88. PricePrediction.net , on the other hand, said that the coin would reach $6.47 this year. 

Polkadot Forecast for 2025

Moving onto a Polkadot price prediction for 2025, CaptainAltCoin argued the coin would recover by then, reaching $43.01, while PricePrediction.net thought DOT would trade at $13.39. DigitalCoinPrice was somewhere between the two, saying the crypto would stand at $16.86.

Polkadot Forecast for 2030

Looking at a more long-term Polkadot price prediction for 2030, PricePrediction.net said it would reach $87.55, while DigitalCoinPrice thought the coin would trade at $53.47. Again, though, CaptainAltCoin was out in the lead, making a DOT price prediction that said it would be worth $107.51 at the start of the next decade. 

Is Polkadot a Good Investment?

It is difficult to tell. Although Polkadot 2.0 is undoubtedly exciting, that anticipation should be tempered by the fact that we don’t really know what it is going to look like. 

Meanwhile, the platform had a particularly poor second quarter in 2023.

That said, DOT is one of the larger, more solid, crypto platforms out there, and it has managed to bounce back from adversity before. 

The fact that it has avoided being on the SEC’s list of potential crypto unregistered securities should also be considered a positive for the coin. 

On the other hand, its performance so far this year has been less than stellar, and investors may want to consider their options when it comes to making an investment. 

As ever with crypto, you will need to make sure you do your own research before deciding whether or not to invest in DOT.

Will Polkadot go up or down?

No one can really tell right now. While the Polkadot crypto price predictions are largely positive, price predictions have a well-earned reputation for being wrong. Keep in mind, too, that prices can, and do, go down as well as up. 

Should I invest in Polkadot?

Before you decide whether or not to invest in Polkadot, you will have to do your own research, not only on DOT, but on other, related, coins and tokens such as Cosmos (ATOM) and Polygon (MATIC).Either way, you will also need to make sure that you never invest more money than you can afford to lose.

FAQs 

How many Polkadot are there?

On July 31 2023, there were 1.2 billion DOT in circulation out of a total supply of 1.3 billion.

Will Polkadot reach $100?

It might do but, if it does, it won’t be for a while. CaptainAltCoin thought it would reach three figures by 2030, while PricePrediction.net had it getting there the by following year and DigitalCoinPrice said it might happen in 2032. 

Keep in mind that DOT has never reached $100 before, with its all-time high of $55 coming in early November 2021. 

What is Polkadot used for?

The DOT coin is used to help secure the Polkadot blockchain, allow people to vote on proposals to the network and reward the system’s users. It can also be bought, sold, and traded on exchanges. 

Disclaimer 

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.