Introduction
Polkadot is an important blockchain that connects other blockchains making it possible for users to share data and perform multiple tasks. This coin was created as an improved version of Ethereum and designed to carry out fast transactions at a cheaper rate. It provides the layer for creating new crypto projects. Given the increasing popularity of this coin, many believe that this coin will one day rise to the same value as Bitcoin and Ethereum. Can Polkadot achieve this target? You will have to read on to find more.
We have further discussed in this work, the use case of the Polkadot and other important points you should know about this coin before proceeding to invest in it today.
What is Polkadot?
Polkadot is an important blockchain innovation designed to enhance interoperability among blockchains making it possible to communicate and share data across hitherto incompatible networks. It unifies unrelated blockchains into one using its relay chain network. It also has a parachain layer on its blockchain which makes it possible for users to perform multiple tasks at the same time on the blockchain.
Price history of Polkadot
Polkadot has witnessed amazing growth in its price from its launch till the present moment. The price of this coin has risen from its issue price of $0.29 to attain an all-time high of $55.10 in October 2021. The price has been resilient afterwards and always bounced back after each dip. Polkadot ranks amongst the most traded cryptocurrencies in the world today. The coin is today valued as the eleventh most valuable cryptocurrency in the world based on the capital invested in it.
How to trade Polkadot
There are two major ways of trading Polkadot today known as Spot and CFD trading. We have discussed these two methods below:
- Spot Trading:Spot trading involves buying the Polkadot through the spot trading platform provided by a crypto exchange and holding this coin over a certain period in the hope of selling when the price appreciates so much in the future. Spot trading offers the trader legal ownership of the Polkadot purchased. This means he can transfer them from one exchange to another or even store them in his cold wallet.
- CFD trading:CFD trading is a leveraged form of trading where the investor is allowed to buy Polkadot (DOT) with leverage provided by the broker or crypto exchange for trading. Trading Polkadot with leverage allows the trader to maximize his returns by taking larger positions in the market using a borrowed fund from the broker. An important point to note about CFD trading is that there is no legal ownership of the Polkadot purchased and the trader is exposed to high risk should he take a wrong position.
Best Crypto Exchanges to trade Polkadot
Binance
eToro
Gemini
Bitstamp
Bitfinex
Capital.com
Kraken
Kucoin
Coinbase
Huobi Global
Is Polkadot a good investment package?
Polkadot ranks amongst the most successful crypto projects today. This coin has yielded over 5700% ROI to its earliest investors from its issue price of $0.29 to its all-time high created at $55.10. Many who trade this coin today still expect this coin to revisit its all-time high. Notwithstanding, there is no assurance that this coin will revisit this level as all crypto predictions are largely speculative.
Advantages of buying Polkadot
- Exposes the trader to the financial market.
- Provides a means for diversifying one’s portfolios.
- Hedging against inflation.
Disadvantages of buying Polkadot
- It is a risky investment.
- No guarantee for profits.
- Subject to Bitcoin’s dominance in the market.