Prediction: Polkadot (DOT) Will Hit $10 by 2025 | The Motley Fool (2024)

The Polkadot (DOT 0.38%) cryptocurrency could double in price next year. I know that's a strong statement -- but it comes with short-term caveats and even greater long-term prospects. So I expect the Web3 cryptocurrency to rise from less that $5 to more than $10 in about a year and a half, but it's still kind of a mixed bag.

Let me untangle the good and bad news lying ahead for Polkadot and its investors.

How Polkadot supports the decentralized web

First, the Polkadot blockchain ecosystem remains a key piece of the Web3 technology revolution. The idea is to cut the web and mobile apps loose from centrally controlled social media powerhouses and give more power to the creators and consumers. Many cryptocurrencies will play significant roles in this shakeup; the Polkadot network and its DOT token are the glue that holds Web3's separate pieces together.

Many leading players in the current Web2 system would love to stay in this era, and it's never quick or easy to change the habits and behavior of millions of consumers. Yet, many powerful forces work in Web3's favor, and I think it's an inevitable next step in the evolution of online services.

The rise of Web3 will take a while, of course. The term was first coined 10 years ago, gaining momentum around the coronavirus lockdown era.

I'm not saying that decentralized finance apps and highly personalized content platforms will magically appear overnight, upending the web as we know it before the end of 2025. Polkadot's bullish argument is more subtle than that.

Understanding Polkadot's price moves

I'll get back to Polkadot's future and the Web3 upgrade in a minute. It's time to check out Polkadot's volatile price chart.

It's important to note that $10 apiece isn't new territory for Polkadot's staking and governance token. The token peaked above that benchmark earlier this year, but only after dipping as low as $3.65 per token just five months earlier:

Polkadot Price data by YCharts

On a longer timescale, the DOT token peaked at $54 in fall 2021, just before the global inflation crisis kicked off. The average Polkadot price is roughly $13 across its four-year history. So going back to $10 next year shouldn't surprise anyone, but the token is just as likely to follow a brief jump with swinging lower again.

That freely moving price chart is why I'm so convinced that Polkadot will regain the $10 level fairly soon. It may not stay there for very long, but a quick win is a quick win.

Why investing in Polkadot could pay off big -- but slowly

Given all that, I still highly recommend grabbing some Polkadot tokens while they're affordable, and then try your hardest not to play the market-timing game. Hold on to those volatile tokens through thick and thin, perhaps adding more by buying Polkadot on the dips or by sticking to a strict dollar-cost averaging plan.

You see, the Polkadot community has big dreams, deep pockets, and some serious technology upgrades on the back burner. Chiefly, I'm looking forward to the JAM upgrade, proposed by Polkadot founder Gavin Wood. This project will replace Polkadot's central relay chain with a more powerful, flexible, and faster join-accumulate machine, or JAM network. Not to get too technical, but the JAM idea will focus on tight security and efficient message-passing, letting a separate set of computers do the heavy work of executing code in smart contracts.

So it's a lightweight cross-network communications solution, backed by plenty of big-iron computing muscle at arms-length.

After the JAM update, Polkadot should be ready to build interconnected crypto networks at a global scale. At the same time, its inherent processing power could steal moneymaking workloads from smart contract giants Ethereum (ETH 0.83%) and Solana (SOL 0.31%).

Now, JAM is still in the planning stages and probably won't be available in 2025. Still, the forward-looking upside of this incoming productivity boost should drive the DOT token's price higher over time. As discussed, Polkadot's price can make large moves in a hurry, and the prospect of a better technology platform should be more than enough inspiration for a significant uptick.

Why now is a great time to invest in Polkadot

There you have it: Polkadot looks ready to double in price fairly soon, at least temporarily. At the same time, the real upside of the Web3 sea change and the related Polkadot asset's value lies many years ahead.

The core principles of buying Polkadot tokens today are twofold:

• You want to buy low and sell high.
• Time is an investor's best friend.

So why not pick up a few tokens while they're on sale for less than $5, then watch them build real-world usage and serious value for years to come?