Earlier XRP had already lost its 4th rank, but it was another altcoin, Cardano (ADA), that occupied it. Apart from the stablecoin Tether (USDT), now Polkadot (DOT) has entered the top three cryptocurrencies. This became a surprise to the market players and analysts. So far there are no deep and high-profile publications explaining the new situation on the market.
The Polkadot project was launched by the Swiss foundation Web3. The Foundation finances developments aimed at creating a free, decentralized Internet. Polkadot perfectly meets this goal. Its protocol ensures the transfer of any data between different blockchains, including any assets. Polkadot connects private and enterprise blockchains, allowing different blockchains to exchange information with each other and conduct transactions without a trusted third party (trustlessly).
The ICO of the project was held in October 2017, then it raised over $140 million. In March 2020, the Web3 Foundation provided another grant for the development of interfacing the Polkadot blockchain with the bitcoin blockchain. The grant was received by the Interlay company, which deals with the interoperability of DeFi projects. On November 30, 2020, Interlay announced the launch of PolkaBTC Alpha, thus indicating that a bridge has been created between the BTC blockchain and the Polkadot platform. The full launch of PolkaBTC is scheduled for the first quarter of 2021.
Here is the answer to the question of why Polkadot (DOT) soared last week. Before that, from September 2020 to December, the DOT price was in the $5.8 – $3.8 corridor. The token at this time was listed on only a few exchanges. Since December, everything has changed, the exchanges began to list DOT one after another, and the DOT price began to rise fast. Now it is hitting the $17 resistance level. But this is hardly the limit of rising. It is highly likely that DOT will rise simultaneously with BTC. While bitcoin is growing, so is the Polkadot (DOT) token. According to bitcoin analysts, the price of the king of cryptocurrencies on this wave of rising could reach $40K. If this is the case, then the DOT can rise to approximately $20.
As for the new token PolkaBTC, it also has good prospects. Unlike similar tokenized bitcoins, PolkaBTC will not be operated by a centralized custodian but will remain completely decentralized. PolkaBTC is collateralized by Polkadot’s own token, DOT. Considering that Interlay is also involved in DeFi projects, and they had been a hit in 2020, it is possible that in 2021 the combination of DeFi and Polkadot will bring traders and investors more profits.