Coin Bureau Lists Reasons To Remain Bullish On Polkadot (DOT)
According to Coin Bureau the native token DOT of a blockchain-interoperability project Polkadot has a lot of potential to become one of the leading crypto assets this year.
In a recent video session, the host of Coin Bureau, known as Guy shared with the channel’s 1.95 million subscribers that DOT has a lot of potential this year.
“DOT could become one of the top cryptos of 2022.”
The analyst notes that traders were expecting DOT price wise to climb a lot higher last year, which DOT couldn’t deliver due to various reasons.
“Despite all of Polkadot’s developments, updates, and announcements – DOT hasn’t done much in terms of price and is actually down almost 50% since I last covered the project in October [last year]. This is for a few reasons.
For starters, the crypto market has been down since November, and crypto investors have been feeling very uncertain due to various macro factors. When this happens, money tends to flow from altcoins into BTC, and this is exactly what we’ve seen…
DOT is the most popular cryptocurrency among institutional crypto funds besides BTC and ETH – and by a wide margin, compared with other altcoins. As it so happens, institution investment vehicles for crypto have seen record outflows since November, especially those for altcoins, like DOT.
While inflows to these institutional investment vehicles have started to pick up in recent weeks, most of this money has gone to BTC and ETH, with altcoins like DOT lagging behind.”
The analyst talks about DOT’s circulating supply, which according to him is restricted enough to be positively influenced by a small amount of investor demand.
“The good news is that DOT’s circulating supply hasn’t increased by much… Only about 50 million additional DOT entered circulation since October. Some of this DOT likely came from the Web3 Foundation, which gave grants to over 100 Polkadot projects last year. The rest probably came from a combination of staking rewards and selling by early investors, given that their DOT allocations have been fully-unlocked since January [last year].
This increase in supply is minimal compared with the massive amount of DOT that has been locked up in Polkadot’s parachain slot auctions. If my calculations are correct, almost 150 million DOT has been locked up so far. This works out to about 15% of DOT’s circulating supply. When you add that to the 52% of DOT that is currently being staked with a 28-day lockup, you’re left with a very small supply of DOT that can be traded – and this supply restriction means DOT could pump a lot with just a little bit of demand.
The only question is where exactly this demand will come from. Besides parachain slot auctions, there aren’t really any other demand drivers for DOT for the time being.”
While in the current situation there could be more price drivers, however Guy remains optimistic about investor demand for the digital asset this year. It doesn’t take a huge amount of demand to send DOT to new all-time highs, he points out.
“With a bit of luck, though, Polkadot’s upcoming interoperability protocol will create enough demand drivers for DOT across its ecosystem to cause some positive price action.
If it does, I reckon we could see DOT re-test its previous all-time high of $52 and secure a new one somewhere in the $60 to $70 range.”
At the time of writing, DOT is trading at $18.30, down 6.95% on the daily frame, along with the rest of the market.
