Is Polkadot worth investing in? How long can this round of market last?
In the past two days, the rotation effect of the sector has appeared, and the tokens in Polkadot and its ecology, as well as ATOM, which is also a cross-chain theme, have skyrocketed.
So many friends on the Internet asked if tokens such as Polkadot and ATOM are worth investing in?
Regarding whether a project’s tokens are worth investing in, I used the CRV project as an example to conduct a detailed analysis in my August 15 article "Facing DeFi Projects with "Plunges and Skyrockets", Talking about My Investment Logic, and gave a detailed analysis. We demonstrate a relatively simple method.This method is simply to estimate its total market value.
I will use this method to evaluate whether Polkadot is worth investing in now.
Polkadot recently conducted a split, similar to a stock split in the stock market. After this split, the total issuance of Polkadot has become 1 billion. At the time of writing, the price of terrestrial tokens (DOT) is $4. Its total market capitalization is $4 billion.
Where does this stand in the overall digital currency market? It is ranked 7th in terms of market capitalization. Then we have to consider how much Polkadot can be ranked at most.
In my opinion, Polkadot is at most ranked in the position of Ethereum, that is, the market value reaches 44 billion U.S. dollars, and its unit price is 44 U.S. dollars. But we should pay attention to that once the market value of any digital currency enters the top 10, every step is quite difficult, and it is even more difficult to enter the top 5. Therefore, we value it with a relatively reasonable market value ranking fifth. When its market value ranks fifth, that is, the market value reaches US$5.2 billion, and its unit price is US$5.2.
So according to my method of evaluation, Polkadot is more likely to reach a high of $5.2, and the highest price is $44.
However, none of us can predict how irrationally the price of a currency will rise in a crazy market, so it is entirely possible that the price of Polkadot is higher than $44. But this extreme situation is not what we should think about as rational investors.
This is just an estimate of the high price that Polkadot can theoretically reach from the currency price, but can Polkadot actually get out of such a high market? There are too many factors. In my opinion, it will be quite difficult.
I have mentioned Polkadot many times in previous articles and my sincere admiration for Dr. Gavin Wood, the founder of Polkadot, but the fact is that if Polkadot wants to get out of a bigger market, it must challenge the ecology of Ethereum, which is very important. hard.
The current ecology of Polkadot gives me the impression that there are many projects, but they are not organically connected as a whole. The reason why the currency prices of projects in these ecosystems have soared is more because they have caught on to hot spots rather than actually creating value and ecology.
Therefore, I personally would not invest in Polkadot from the perspective of long-term investment. No matter how high this round of Polkadot rises, I will only pay attention to it and not buy it. "Only take a scoop of three thousand weak waters to drink"--I only grasp the opportunities that belong to me.
How far and how long this round of market can go next is also a topic of concern to many friends.To see the development of the market, I think it depends on two aspects: one is how long the driving force of the current market development can last, and the other is whether there will be a follow-up driving force in addition to the current driving force.
The driving force of the current market is obviously DeFi, and the current development of DeFi still has some stamina in my opinion. New projects and new ways of playing are still continuing, and will continue to promote the development of everyone's expectations in the foreseeable future. In addition to the driving force of DeFi, I think a very important follow-up driving force is the launch of the beacon chain mainnet.
Judging from the current status of the Beacon Chain test network, although there are various problems, the overall progress is relatively smooth. The launch of the mainnet of the chain is likely to greatly increase the popularity of Ethereum itself and push up the price of Ethereum. And this will form a linkage with DeFi to further promote the development of the entire ecology of Ethereum.
Therefore, I think that this round of market will not be a big problem until the end of the year or even January-February next year. But with the development of this round of market, how high the price of each currency can go is not something that individuals can predict.
