Cryptocurrencies have seen some hard times this spring. With the exception of stablecoins, the 10 largest cryptocurrencies on the market have lost 34% or more of their market value in 2022. A casual observer might take one look at this meltdown and conclude that this is the end of cryptocurrencies as an investable asset class.
That’s a big mistake, though. The sharp market correction will weed out some of the weaker names, but the best blockchain systems and digital currencies should soon be growing again. In particular, I think this is a great time to pick up a few Polkadot (DOT -21.26%) tokens at a massive discount.
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What does Polkadot do?
Polkadot is already a household name. With a market capitalization of $8.6 billion, it’s the 12th largest cryptocurrency, as measured by market value. Polkadot also ranks among the top 20 crypto names by daily trading volume.
The Polkadot ecosystem had just launched its first parachain slot auction when the crypto market suddenly turned sour last winter. With a regular schedule of a new parachain slot auction every two weeks, Polkadot completed its 16th auction in late April. These auctions are a crucial part of Polkadot’s core function, making it easy for a variety of blockchain systems to connect and interoperate.
For example, the winner of the 16th slot auction is Polkadex, a peer-to-peer trading platform with ambitious goals in the decentralized finance sector. Other winners include the Astar module library, which boosts the processing ability of existing blockchains, and the Moonbeam cross-chain connection toolkit. Thanks to Moonbeam and other connectors in this category, Polkadot applications can work with Ethereum smart contracts, tap into Bitcoin value storage, and read data from the Chainlink network.
Put all of these components together, and you get the building blocks of the next generation of the internet. In fact, Polkadot was started by Ethereum co-founder and Web3 Foundation president Gavin Wood.
This evolving development platform and cross-chain blockchain network was designed with Web3 in mind. When social media apps and tight-fisted content publishers give way to a new generation of decentralized systems for media, communication, banking, and more, you’ll see Polkadot running the show.
What’s next for Polkadot?
Amid the market turmoil of 2022, Polkadot has simply continued to run its parachain slot auctions and take baby steps toward the large-scale introduction of Web3 applications. Meanwhile, investors backed away from Polkadot in a hurry. The DOT token has fallen 70% year to date, even though the Polkadot network only looks healthier and more complete than ever.
Polkadot is a no-brainer buy in my book. The latest market retreat looks like the crash of 2017, where the leading cryptocurrencies plunged at least 50% lower and stayed down for three years. But the crypto market is more mature these days, and regulatory bodies are getting closer to setting up proper rules for trading and taxation in this newfangled digital asset class.
I wouldn’t be surprised to see a quicker rebound this time. Polkadot is poised to play a leading part in the crypto market’s long-term recovery. I don’t think you want to miss that surge.
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