Polkadot breaks out and is now the eighth-largest cryptocurrency by market capitalization — but what is the reason for the sudden price increase?
But why does the DOT price suddenly break out? The main reason for the surprising price increase is likely to be the listing of the DOT token on Coinbase: In a blog post last Monday, Coinbase announced that traders will be able to trade DOT on Coinbase Pro from June 16.
Typically, that means that Polkadot will also be available on Coinbase’s retail trading platform in the next few weeks. Some investors are therefore probably already betting on DOT — in the hope that demand will increase in the near future. Since this has happened several times in the past with other cryptocurrencies, this phenomenon is called the “Coinbase Effect” in crypto jargon.
At the moment, you have to wait and see when exactly DOT will also be released for regular trading on Coinbase. However, it could well be that this time coincides with the start of the Parachain auctions on Polkadot, as these should go live in a few weeks. The start of these auctions could lead to an increase in demand for the Polkadot ecosystem token DOT — similar to what happened in the past with Kusama.
Because on Kusama, often referred to as the experimental version of Polkadot, Parachain auctions started successfully on June 8th. Many take this as a positive sign that the parachain auctions on Polkadot will also work well.
Another positive piece of news for the Polkadot ecosystem comes from Switzerland, albeit not quite as price-driving. The non-fungible token (NFT) project RMRK has announced that it has received six million US dollars in investment capital to build a cross-chain NFT infrastructure.
RMRK wants to build an infrastructure for trading NFT between blockchains such as Ethereum and Polkadot. On this mission, RMRK takes a different approach than many Polkadot projects. Instead of dealing with oversaturated parachain auctions, RMRK decided to cooperate with other projects.
The first implementation of the project should therefore take place on the Unique Network, a project that specializes in the NFT sector of Kusama and Polkadot.
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