Spartan Black, a major cryptocurrency fund based in Asia, believes Polkadot (DOT) has more fuel left in the tank and could soar into the top-3 list of biggest cryptocurrencies by market capitalization.
Currently, the popular protocol is listed as the sixth largest cryptocurrency by market capitalization at CoinGecko.
Since listing on Binance eight days ago, the price of DOT soared by more than 200% and many analysts believe the price could rise significantly higher.
There are several favorable factors buoying the sentiment around DOT. The protocol does not directly compete against the Ethereum Network, it scales rapidly, and as a result, could offset the issue of high fees on Ethereum.
Polkadot’s market cap is at $5.6 billion so what will fuel further growth?
DOT has seen meteoric growth in recent weeks in terms of both valuation and projects. Data from PolkaProject shows there are 197 projects in the Polkadot ecosystem already.
Apart from having strong technologies, Polkadot also has arguably one of the most decorated developers within the smart contracts space.
Gavin Wood created Polkadot in 2016 and is a key figure behind the development of Ethereum’s solidity programming language and Parity Technologies. Wood also played a key role in the growth of the Ethereum Network over the past four years.
The combination of an active community, a growing number of projects in the ecosystem, and Wood’s involvement appear to be driving the demand for DOT.
Spartan Black’s Kelvin Koh predicted in mid-August that DOT would hit $5 based on the market capitalization of Cardano. Within weeks of the prediction, DOT surpassed $5, rising to as high as $6.57. At the time Koh said:
“If ADA’s market cap is $3.8B, then Polkadot should be worth at least $5B i.e. $5 per DOT.”
As a follow up prediction, Koh said that he expects DOT to become a top three cryptocurrency on Coingecko and CoinMarketCap. He stated:
“Another prediction: within a year DOT will be Top 3 market cap on Coingecko/CMC.”
Not competing against Ethereum is an important factor
Ethereum has been by far the most dominant smart contracts blockchain protocol to date. It has a valuation of $43 billion, followed by DOT at $5.6 billion.
Polkadot does not directly compete against Ethereum and as Koh explained, the long-term prosperity of DOT should not result in a decline of Ethereum.
Blockchains, like Polkadot and Cosmos, which enable multiple blockchain networks to exist on their protocols, are structurally different from Ethereum. Koh explained:
“I believe in a multi-chain world interconnected by bridges. Polkadot and Cosmos will not replace Ethereum. Also wouldn’t rule out chains like Near, Solana, AVA, TRON and others seeing development activity.”
If Polkadot, along with other smart contracts protocols, can co-exist with Ethereum, it raises the chances for long-term survivability.
Major exchanges have already listed DOT after its major denomination change, showing support for the cryptocurrency. Even U.S. exchanges, including Kraken, listed DOT quickly after its launch.
Blocktown Capital’s Joseph Todaro said:
“Kraken listing Polkadot before Coinbase and Binance US has been a massive win. If you are in the US and want DOT exposure Kraken is where you have to go.”
Exchange rate stabilises at N410/$1 as oil price rallies above $65 per barrel
The exchange rate between the Naira and the US Dollar closed at N410/$1 at the Investors and Exporters window on Monday as oil prices hit $65.24 per barrel
Monday 22nd February 2021: The exchange rate between the Naira and the US Dollar closed at N410/$1 at the Investors and Exporters window, where forex is traded officially.
Naira remained stable on the NAFEX window to stand at N470 to a dollar on Monday, which is the same rate it closed on the previous trading day.
Also, Naira depreciated on the parallel market to close at N480/$1 on Monday, 22nd February 2021. This represents a N2 drop when compared to N478/$1 recorded on Friday, 19th February 2021.
Brent Crude oil price hit a record high as it closed at $65.24 per barrel as Goldman Sach’s projection indicates bullish trades in Q2 2020.
Trading at the official NAFEX window
The exchange rate between the Naira and Dollar at the Investors and Exporters (I&E) window maintained the same rate as recorded on Friday last week to close at N410/$1 on Monday, 22nd February 2021.
- The opening indicative rate closed at N408.04 to a dollar on Monday. This represents a 43 kobo drop when compared to N407.61 to a dollar that was recorded the previous trading day on Friday, February 19, 2021.
- An exchange rate of N412 to a dollar was the highest rate during intra-day trading before it closed at N410/$1. It also sold for as low as N389.75/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window declined by 20.8% on Monday, February 22, 2021.
- According to the data tracked by Themoneymetrics from FMDQ, forex turnover decreased from $66.41 million recorded on Friday, February 19, 2021, to $52.58 million on Monday, February 22, 2021.
- The largest cryptocurrency in the world, Bitcoin dipped by 4.76% on Monday to stand $54,753.48 as of 11:10pm.
- This came after the world’s richest man, Elon Musk disclosed that the price of bitcoin and Ethereum seems to be high.
- Meanwhile, three days ago, the world’s most demanded crypto-asset breached the $1 trillion market capitalisation to become the sixth most-valuable asset worldwide.
- It is worth noting that, following the directive of the CBN prohibiting regulated financial institutions from dealing with Cryptos, Nigerians have moved towards peer-to-peer transactions trading directly without a third party.
- According to a recent study seen by Themoneymetrics , the use of Bitcoin for peer-to-peer lending in Nigeria surged by 16% since the CBN directive took effect about 18 days ago
Crude oil prices top $64 per barrel
Crude oil prices picked up again on Monday as Brent Crude gained an additional $2.33 to close at $65.24 per barrel.
- The increase represents a 3.7% increase when compared to $62.91 per barrel recorded on the previous trading day.
- The price increase came shortly after Goldman Sach forecasted that oil prices would climb around $70 per barrel in the second quarter of the year.
- It could also be attributed to the realization that U.S oil production and refineries will take a bit of time to resume their normal level of output after the Texas Freeze knocked out oil refineries.
- The oil market rallied despite the news that Saudi Arabia and Russia might be on the verge of a disagreement again over output agreement, which the group will deliberate on in March.
- Meanwhile, Brent closed at $65.24 (+3.7%), WTI closed at $61.49 (+3.8%), Bonny Light at $62.09 (-1.16%), and Natural Gas closed at $2.946 (-0.24%).
Declining external reserve despite bullish oil prices
Nigeria’s external reserve dipped further on Thursday, 18th February 2021, to stand at $35.47 billion.
- This represents a decline of 0.15% compared to $35.53 billion recorded as of Wednesday, 17th February 2021.
- Despite rallying oil prices, Nigeria’s external reserve has recorded a steady decline since the 25th of January 2021, losing a sum of $958.1 million in less than a month.
- It is worth noting that despite the significant increase recorded earlier in January, the current reserve positive is only $99.9 million more than $35.37 billion recorded as of 31st December 2020.
Gold maintains shine after advancing for two days
The bullion asset regained its lustre after a 2.2% drop recorded in the past week,
Gold stayed on course at the second trading session of the week after advancing for two days, as metal traders awaited testimony from U.S Fed Chief, Jerome Powell.
At the time of drafting this report, the bullion asset traded at $1,807.24 an ounce after rising 1.9% over two days.
The U.S Fed Chief’s semi-annual report at the U.S congress today and the next day will be monitored by metal traders for further policy guidance, and his assessment of the economic recovery at the world’s largest economy.
The bullion asset regained its lustre after a 2.2% drop recorded in the past week, as traders refocus on rising inflation expectations.
In an explanatory note to Our source, Stephen Innes, Chief Global Market Strategist at Axi, gave valuable insights on how the precious metal managed to stay above the $ 1,800-ounce price level.
“It was a strange world seeing the commodity locomotive racing at full steam, but gold left-back at the station. But correlations are looking more normal today after yesterday morning signal gold was trading slightly higher in delayed response to USD weakness. A weaker US dollar remains one of the primary lift-off balloons.
Gold built on Friday’s modest rally, clearing and holding above the USD1,800/oz level. USD weakness was likely the key factor behind gold’s recovery.”
What to expect: The U.S congress may vote on the US$1.9 trillion stimulus package in the coming days, which should hold gold’s appeal as inflation concerns and reflation appeal suggest gold is a good hedge.
World’s largest oil producer loses four million barrels per day
Oil traders are going bullish on the black liquid hydrocarbon, over the unprecedented cold snap in a leading American energy hub, Texas
Oil prices were all fired up at the first trading session of the week.
The unusual winter storm playing in key areas of the world’s largest producer of oil saw an estimated four million barrels per day of oil output shut down in Texas and other states, alongside 21 billion cubic feet of natural gas output.
Oil traders are going bullish on the black liquid hydrocarbon, over the unprecedented cold snap in leading American energy hub, Texas. Also giving crude oil bulls enough gas to stay at least above the $60 price level is the recent progress against the COVID-19 pandemic, in turn, raising hopes for energy demand recovery.
What you should know
- Most recent data retrieved from the Energy Information Administration reveal the United States is currently the world’s largest producer of oil, producing about 19.45 million barrels per day or 19% of the world’s total crude oil production in 2019.
- At press time, Brent crude futures rallied by 1.13% to $62.84 a barrel with the Brent crude contract turning over in February 21 to the May 21 contract.
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, gave key insights on other macros weighing on oil prices at least for the near term amid high positivity prevailing in global financial markets
“What began as a power issue for a handful of US states quickly turned into a global supply shock for the oil markets. Still, the re-start of shut-in US production and news that the Biden administration is exploring diplomatic re-engagement with Iran have contributed to a cooling of oil prices, despite the bullish inventory data.
“But “the day after”, see oil prices nudging higher amid ongoing evidence of recovery in global demand, mostly good news on the Covid-19 trends and anticipation of a nearly 2 trillion US stimulus designed to get people working again quickly.”
What to expect
- The sharp surge in crude oil prices before OPEC+’s all-important meeting next month means the calculus for the OPEC+ alliance becomes more complicated.
- However, as oil output stays constrained, crude oil stockpiles are dropping and with COVID-19 vaccines promising a return towards normalcy at the end of the day, expectations continue to run high for oil markets.
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