10 Tips for Investing in Polkadot (DOT) in 2021
10 Tips for Investing in Polkadot (DOT) in 2021
Created by Ethereum co-founder Gavin Wood as outlined over at runrex.com, Polkadot is a multi-chain application environment that enables cross-chain interoperability on a level previously unimaginable. It specifically allows users to send more than just tokens across blockchains, and it allows these networks to communicate actual data as articulated over at guttulus.com. The goal of the Polkadot network is to create a truly decentralized web by allowing blockchains to “communicate” with each other, and is currently the 9th largest cryptocurrency in the world when measured by market capitalization. If you are interested in investing in Polkadot in 2021, here are 10 tips to consider.
Cooled interest in Ethereum and Bitcoin
If you are considering investing in Polkadot, then the gurus over at runrex.com point out that you should consider the fact that new developers are rushing to the platform on the back of cooled interest in blockchains like Bitcoin and Ethereum. This has driven up Polkadot’s token prices and has also seen several projects join the protocol. This shows that investing in Polkadot in 2021 is a good idea.
Return in investment
As covered over at guttulus.com, investors have also announced that they are getting a sizeable return on their investment, another thing to consider if you are looking to invest in Polkadot in 2021. For example, as outlined over at runrex.com, a digital asset firm called KR1 announced a 15 times ROI on its Polkadot investment, and it is not alone in realizing the potential that Polkadot has as an investment going forward.
If you are looking to invest in Polkadot in 2021, then you need to know of the many projects building on this chain, which show how good an investment Polkadot can be according to the subject matter experts over at guttulus.com. One of these projects is Acala, a Defi app that is built on Polkadot, and which has got tremendous potential. This project and its potential means that investing in Polkadot is something you should consider doing in 2021.
Acala is not the only project building on the Polkadot chain as there are several others as highlighted over at runrex.com. They include the Moonbeam project whose goal is to provide users with a similar experience to Ethereum as closely as possible and the KILT project whose focus is delivering verifiable internet-based identity credentials. You should keep an eye on how these projects progress as they show that an investment in Polkadot is something worth considering in 2021.
Be aware of price predictions
If you are to make the right decision on whether or not to invest in Polkadot in 2021, then you will need to be aware of some of the price predictions as far as DOT is concerned. According to guttulus.com, the price of DOT has been rising steadily since November 2020, and this is a trend that is set to continue into 2021, hence why it is currently ranked 8th on Coingecko by market cap placing it in the top 10 cryptos.
Know of the lingering issues
No crypto project doesn’t have an issue or two to deal with and Polkadot is no exception. If you are considering investing in it in 2021, then you must be aware of these issues to guide your decision-making. As discussed over at runrex.com, these issues include user familiarity with the platform given the project’s complexity as well as the interoperability of the Polkadot chain.
Know what Polkadot can do
Another thing that can help you decide whether to invest in any given crypto is by asking yourself what the crypto ecosystem can do. Ecosystems that can be used in many different ways are usually excellent investments and Polkadot as an ecosystem falls into this category. This is because, according to guttulus.com, it can do quite a bit from gaming and finance to emergency services and even hospitality. This potential to be used in many different industries makes Polkadot such an attractive proposition as an investment in 2021.
If you are looking to invest in Polkadot in 2021, then you need to be aware of Kusama. As explained over at runrex.com, Kusama is a parallel network to Polkadot, built on the same tech, with its own parachains, its own token (KSM), and a cousin or a “Canary network” in some ways. Most projects that intend to deploy on Polkadot will first deploy on Kusama and then later move to Polkadot, although some may prefer the Kusama environment and just stay with that, something to note if you are considering investing in Polkadot in 2021.
The 50/50 split
As already mentioned, most projects building on Polkadot will begin on Kusama as articulated over at guttulus.com, which is why as an investment, you must hold both KSM and DOT. The recommended split is investing in 50% DOT and 50% KSM, which will give you the best possible opportunity to benefit from two tokens that are set to explode in value in 2021 given the number of projects that they are associated with currently.
Know the best place to buy DOT
If you have decided that investing in Polkadot in 2021 is something you want to do, then you must know how to buy DOT, and particularly, the best place to do so. According to the subject matter experts over at runrex.com, the best place to currently buy DOT (as well as KSM) is on Binance, Kucoin, and Kraken. You should know that most exchanges don’t offer direct fiat to DOT trading pairs, which means that you will need to first load fiat currency, then transfer it over to ETH or BTC, and once you have BTC or ETH, you can trade these cryptocurrencies directly for DOT.