Polkadot Surged 67% In One Week, What’s Behind The Price Boost?

Polkadot surged 67% in one week and entered the best performing top 100 crypto assets in the past week as we can see more today in our altcoin news.

There are two key reasons behind the strong rally of Polkadot. It broke out against BTC at first which led traders to accumulate DOT. It is also fundamentally improving as potentially the next huge DeFi ecosystem. DeFi is growing rapidly with major investment firms in the sector awaiting for the total value locked in DeFi to hit $100 billion by the end of 2021. The total value locked refers to the amount of money that is used on Defi protocols. So, if the TVL hits $100 billion it will mean that over $100 billion worth of the capital was deployed to the DeFi platforms.

Polkadot is a super network for most smaller blockchains named parachains. It can scale even better and it has an increased capacity than other smart contract blockchain networks such as Ethereum. If the Defi sector continues growing, there will be enough room for Polkadot, Cosmos, and a few others that are directly competing against ETH. Bobby Ong who is the co-founder of Coingecko said that the market will likely see apps launching on Polkadot and Serum in 2021. However, he also said that it is hard to imagine other blockchains that will gain some foothold which will be extremely beneficial for polkadot. He explained:

 “We will see existing DeFi apps launching on other Layer 1 platforms like Serum & Polkadot. Hard for me to imagine any other L1 platforms gaining a foothold. We will see a multi-chain Metamask-like wallet making it easier to connect to multiple blockchains.”

Ong also noted:

 “DeFi derivatives will become more popular and will be driven by the large number of long tail coins not traded by CEX. Futures, perpetual swaps, options pricing on DEX will become as competitive as its centralized operators.”

Since Polkadot and Serum focus on scalability, DeFi derivatives on these protocols will be even more compelling. Michael Van De Poppe who is a full-time trader at the Amsterdam Stock Exchange explained that Polkadot will be one of the strongest assets next year it Polkadot surged 67% over the past week:

 “Polkadot will probably be one of the strongest cryptocurrencies in 2021. Broke upwards and made an all-time high. This chart shows the levels to watch for potential dip opportunities before it continues its run towards $10.”