Polkadot

Polkadot Returns vs S&P

-46.70%

Versus S&P

-3.20%

12 minutes ago

-46.70%

Versus S&P

-3.20%

12 minutes ago

6m High

6m Low

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Polkadot

$10.54

$5.19

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S&P 500

4,305.20

3,577.03

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Polkadot

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S&P 500

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Does not follow the stock market

Sources: SPX, DOT

In the Market

Buy individual shares of Coinbase (COIN), the largest exchange for Bitcoin and other altcoins (including Polkadot). Coinbase went public back in April 2021.

Highlights

Good For

High risk, high return

Time Horizon

3-5 years

Diversification

Environmentally Friendly

Bitcoin was the first cryptocurrency in the world, offering the ability to store and transfer value in a trustless manner. Then Ethereum came along and offered the ability to perform more complex tasks through smart contracts. But Ethereum's popularity has been a double-edged sword that resulted in high transaction fees and network congestion. Not to mention, it is still cumbersome to move crypto assets between blockchains like Bitcoin, Ethereum and others. Polkadot (DOT) is a “layer 0” blockchain that intends to make other blockchains more scalable and interoperable through its Relay Chain, Parachains and Bridges. Additionally, Polkadot is a Proof-of-Stake (PoS) blockchain, meaning that investors can generate passive income by staking their DOT. While Polkadot has a lot going for it, it is competing within a space that is saturated with many other promising smart contract platforms.

Did you Know

  • poitStar

    Polkadot was founded by Dr. Gavin Wood, who also co-founded Ethereum and helped develop Ethereum’s Solidity programming language.

  • poitStar

    Polkadot had an initial maximum supply of 10 million tokens, which the community voted to increase to 1 billion DOT in 2020.

  • poitStar

    The Polkadot team raised $145 million in their 2017 Initial Coin Offering (ICO) but lost about 60% of those funds due to a wallet vulnerability now known as the Parity bug.  To make up for this devastating loss, the team had to hold two more private sales in the following years.

Considerations

    Reasons to Invest

  • Polkadot (DOT) is a “layer 0” blockchain that intends to make other blockchains (e.g. Bitcoin, Ethereum) interoperable. This way investors will be able to swap crypto assets across blockchains without the use of an exchange.

  • While Polkadot has a solid value proposition, many other blockchain projects are implementing similar features (e.g. bridges, sharding) to address interoperability and scalability.

  • Polkadot does not have the best track record when it comes to security, as millions of dollars have been hacked from the founding team’s wallet during their early days.

    Drawbacks

  • Polkadot’s development was kicked off in 2017, but it only became fully operational in 2020. Compared to a platform like Ethereum, Polkadot is not tried-and-tested.

  • While Polkadot has a solid value proposition, many other blockchain projects are implementing similar features (e.g. bridges, sharding) to address interoperability and scalability.

  • Polkadot does not have the best track record when it comes to security, as millions of dollars have been hacked from the founding team’s wallet during their early days.

How You’re Taxed

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How You’re Taxed

Income Tax

Income Tax

Capital Gains

Capital Gains

In the U.S., any time an investor sells or swaps their crypto, they owe capital gains taxes. The exact rates vary: with short-term capital gains taxed as income (ranging from 10% to 37%), and long-term capital gains ranging from 0% to 20%. While simply holding DOT does not incur any taxes, receiving DOT from staking rewards is taxed as income. 

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