The crypto space is tanking as of late. Bitcoin has fallen by about ten percent in the past two days, while Ethereum, Ripple, Cardano and Litecoin have all taken dips of anywhere between five and ten percent. However, not every asset is down in the doldrums at the time of writing. Some, such as Polkadot, have retained their high prices and appear poised for more gains in the coming weeks.
Polkadot Continues to Thrive Like No Other Coin
Polkadot is the provider of what’s known as the dot token, a currency that has risen by more than 450 percent in just the last five months alone. The asset is part of a long list of decentralized finance (Defi) tokens that have made their way into the crypto space over the past two years, and the Defi industry continues to grow like there’s no tomorrow.
In January of 2020, for example, the space was valued at just over $1 billion. Today, that value has grown to more than $20 billion. The arena’s big claim to fame is that it can allegedly revamp a lot of traditional financial tools – such as loans and insurance – to make them easier and more accessible to those who really need them.
Interestingly, Polkadot has been on a constant high, rising through the months of both December and January. The currency’s rally continues – even as larger, more mainstream tokens and assets such as bitcoin fall from their recent top positions and slink further into oblivion.
Many analysts are taking this as a sign that Polkadot is going to potentially compete with Ethereum. The ETH network is where many of today’s Defi tokens stem, the dot token included. Luis Cuende – cofounder of the decentralized app company Aragon – explained in a recent interview:
While competitors to Ethereum are making strides and benefitting from the ongoing market rally, I think it’s very unlikely that these competitors will overcome the network effects that Ethereum has built. However, until Ethereum 2.0 is fully functional, Polkadot, cosmos and near are well positioned to capture a meaningful market share.
Some Assets Are Starting to Attract Professional Traders
In addition, the currency – like many Defi tokens at press time – appear to be garnering further attention from institutional players. Seamus Donoghue – vice president of business development at Metaco in Switzerland – mentions in a statement:
Although bitcoin is viewed as a macro inflation asset, Ethereum has the potential to be the foundation for a new decentralized capital market infrastructure. New protocols such as Cardano and Polkadot are also vying for the foundational infrastructure play, but whatever the merits of their protocols need to overcome the significant developer mindshare and network advantage Ethereum currently has… It is early days, but the entire sector is looking cheap compared to bitcoin.
At the time of writing, one unit of Polkadot is trading for a little over $16.
