Should you buy Polkadot (DOT) when it’s under $10?

that much polka dot (dot -0.94%) The cryptocurrency price recently reached nearly $10 per token and peaked at $9.50 for a few minutes on Christmas Day. Since then, the Web3 Foundation’s official cryptocurrency network has fallen to $7 per token.

That short-term rise was Polkadot’s highest price since the summer of 2022. Whether the price is $10 or $7, prices have recently fallen significantly from their all-time high of $55 per token just before the fall inflation crisis began. On a positive note, today’s Polkadot price is almost double the multi-year low from October 2023.

So Polkadot has been on a roller coaster ride these days. Will the next turn be another sharp decline, or will we get one of those upswings that make investors want to shout, “I can see my house from here!”

The truth is that no one knows for sure. But I can make an educated guess. Come along for the ride!

Reasons for the big drop

The brutal price cuts in 2022 reflected several loosely related events.

• Like most cryptocurrencies, Polkadot was caught up in the massive cryptocurrency market decline in 2022 as economic uncertainty led investors to withdraw from riskier assets.
• But that’s not all. Polkadot has close ties to cryptocurrency-based lending platforms like Acala, which suffered when cryptocurrency prices plummeted. This fallout damaged investor confidence in Polkadot and other closely related projects.
• Please wait a minute. We’re almost done now. Polkadot’s parachains are advanced plug-in crypto networks that add functionality to the basic Polkadot network. Their funding and development are managed through parachain auctions, with timely launches taking place according to a strictly scheduled schedule. Unfortunately, some of the 2022 parachain auctions have resulted in delayed launches or underfunding. Investors saw this as another sign of weakness undermining Polkadot’s true value.

Polkadot’s future plans and outlook

I would argue that Polkadot’s critics are making mountains out of anthills.

The entire economy is dealing with an inflation crisis, giving growth stocks and cryptocurrencies a second wind. The lessons learned from the Acala collapse will help Polkadot and its developer community avoid similar disasters in the future. And the weaknesses of parachain auctions were directly related to the problems of the global economy at the time. I have not seen any delays in recent auctions.

Some of the most recent auction winners are back for a second helping of crowdsourced funding. For example, Clover Finance won its second parachain auction on November 6, 2023, renewing its parachain lease that was scheduled to expire after a two-year period. Parallel Finance did the same next week, refilling the operating coffers of another promising decentralized finance system.

Clover connects Polkadot with: Ethereum (ETH -0.34%) With full support for smart contracts, Parallel Finance facilitates loan servicing more intensively than Acala. Therefore, the parachain community is moving forward and doubling down on its efforts to support the most promising projects.

Additionally, Polkadot (and Ethereum) co-founder Gavin Wood proposed a new way to operate the project funding ecosystem under the banner of Polkadot 2.0.

Wood’s new vision aims to plug holes in the original Polkadot design that were discovered only when the system was fully operational. If this looks a lot like the Ethereum 2.0 upgrade, you’re on the right track. New solutions should blend quick cash infusions with strong long-term support to provide more stable and predictable funding across a variety of parachain projects.

Polkadot looks cheap at under $10.

This sounds like a sound cryptocurrency system that leverages all available means to provide support for the Web3 vision. The future of online content and transactions will become more personalized and less dependent on middlemen and intermediaries. Traditional banking services are moving towards cryptocurrency-enabled apps on smartphones, with businesses looking to profit from every interaction. Ownership is being digitized, multiple layers of encryption protect data, and Polkadot serves as the lifeline of these activities.

Now Polkadot is not the only crypto token that can support secure and highly personalized transmission and storage of public and private data. However, it is the only ecosystem designed explicitly for that purpose, and we expect it to serve many popular purposes even as the Web3 market becomes fragmented.

Simply put, it’s a good idea to buy a few Polkadot tokens while they’re cheap. Anything under $10 per token seems like a steal, and today’s $7 level is a much better starting point.