- Polkadot leads the charts in hedge fund altcoin holdings
- More value investors are taking interest in utility-driven cryptocurrencies
- DOT price at a possible bullish wedge breakout
YEREVAN (CoinChapter.com) – The Messari survey in July shows 44% of smart-money investors have Polkadot’s native crypto DOT in their portfolios. The survey has followed up with a huge spike in the Polkadot prices; they jumped 32% off support in the week-long rally.
On July 15, Messari reported screening of top venture capital firms (VC) and hedge funds liquid portfolios. Since they were all Messari-listing firms that hold cryptocurrencies, the results are a bit skewed but still reflect the preferences of investors, crypto-dedicated funds, and traditional investors alike.
The firms hold 225 digital currencies in various protocols. The analysis omits Bitcoin and Ethereum assuming most funds would hold them if they invested in crypto. So, the digital gold and silver aside, Polkadot has had the leading spot among smart money crypto-holdings since April.
Terra (LUNA) was a not-so-close second at 30% of portfolios, while Near Protocol (NEAR) and Oasis Network (ROSE) followed with 27%.
Why hedge funds like Polkadot
If these funds had based their interest on returns (Year-to-Date), the markets would have a completely different picture. Solana would be at the top with around 1500%, and Polkadot would not make the top-five list with 74% YTD.
So what drives the interest in DOT?
Polkadot is the crypto of choice for value investors such as Goldman Sachs and JPMorgan.They go as far as launching DOT-based instruments that increase the exposure to the currency even further.
Although not all prominent smart money-investors are backing cryptocurrencies for their intrinsic value, most include digital assets in their portfolios, at least for diversification.
One of the drivers of interest around Polkadot is its talent. Dr. Gavin Wood, one of the founders of Ethereum, is behind the project.
“We’re seeing talent move on to Polkadot that was going to build on Ethereum […] I think it’s going to be one of the winners in the next few years.”wrote Keld van Schreven for Business Insider.
Furthermore, Polkadot hopes to become the next Ethereum with its two layers of blockchain. The main network relay chain will host permanent transactions while user-created projects can build on parachains. Thus, investors hope to see the utility-based cryptocurrency grow like ETH.
Still, DOT has stiff competition from its interoperable counterpart platforms like Cosmos, Polygon, Binance Smart Chain, etc. The rapid developments in the industry entail that there are no guarantees for first-mover advantage.
A bullish breakout?
Nonetheless, the Polkadot price mimics the recent rally among cryptocurrencies, with a 32% increase since July 20. At press time, the price stands at $14.67 compared to the all-time high of $48 in mid-May.
Since the downslide, the DOT/USDT pair has formed a bullish falling wedge, testing the upper bounds a few times in June. Recently, the uninterrupted green candle sequence predicts a bullish breakout. RSI has returned to the baseline.
However, the current price point is still far from the upper bound of the pattern. A bearish scenario may also play out as the selling pressure increases from risk-averse investors.