Should You Buy Polkadot (DOT) While It's Under $5?

Source The Motley Fool

Cryptocurrencies have been volatile lately.

  • Value carrier Bitcoin (CRYPTO: BTC) rose 76% from September to December before falling back 21% from that peak.
  • Smart contracts enabler Ethereum (CRYPTO: ETH) gained 72% in the same upswing but also dropped back even faster, sitting at a 52% discount from the mid-December peak.
  • And then there's the Dogecoin (CRYPTO: DOGE) jokester, always less stable than its peers. The coin soared 361% higher in the fall but then ran into a brick wall. As of March 18, Dogecoin has lost 63% of its market value since December.

That's the unpredictable backdrop to any serious analysis of cryptocurrencies in March 2025. The election drove many coins sky-high, as investors hoped for dramatically more crypto-friendly policies under the Trump administration. But the new team hasn't actually offered much support to crypto owners so far, which explains the swooning price charts in recent weeks.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

On that note, let's talk about Polkadot (CRYPTO: DOT). The official cryptocurrency of the Web3 Foundation saw impressive gains in November and early December, but lost nearly all of it since hitting that multi-year summit. Today, it's trading at $4.40 per coin and has gained a meager 5% in six months.

Polkadot Price Chart

Polkadot Price data by YCharts

In a broader view, Polkadot has underperformed the S&P 500 (SNPINDEX: ^GSPC) stock market index in the past five years. That's a unique result among the cryptos mentioned above. Is the Web3 coin sliding into irrelevance, or should you buy Polkadot hand over fist while it's priced below $5?

What can you do with the new Polkadot platform?

Polkadot is going through dramatic changes to its technical platform. Formerly billed as a cross-chain specialist that could help app developers build programs with the best features from many different blockchains, Polkadot is emerging as a heavy-duty computing system in 2025.

I'm not kidding. Polkadot founder (and Ethereum co-founder) Gavin Wood has grand ambitions for the revamped virtual machine at the heart of Polkadot's smart contract execution system. The so-called JAM protocol (short for Join Accumulate Machine) will soon become Polkadot's main blockchain network. Wood calls it "the first real Web3 supercomputer" in the long run.

Most smart contract platforms provide a limited set of computing tools. In theory, Polkadot can run any code that will compile for a RISC-V processor. This hardware architecture is an open-source alternative to popular solutions like Intel's (NASDAQ: INTC) x86 processor base or the ARM (NASDAQ: ARM) designs found in everything from smartwatches to data center monster systems nowadays.

The fully functional high-performance version of Wood's JAM vision isn't here quite yet, but the backing group has provided some tantalizing live demos. Speaking at Shanghai's Fudan University in February, Gavin Wood ran the classic first-person shooter game Doom in the form of a compiled smart contract on the Polkadot blockchain. The game didn't require any special code tweaks and looked as antiquely smooth as ever. Then he explained that Doom wasn't much of a strain on the Polkadot execution system, and each one of its roughly 300 validation nodes could probably run 20 of these demonstrations at full speed.

So maybe it's not that impressive to show a game written for 1993-era Pentium processors, but this was just an early demonstration of what's to come. A few years from now, a more robust Polkadot JAM system could indeed shoulder the type of heavy-duty cloud computing you normally see Amazon (NASDAQ: AMZN) Web Services and Microsoft (NASDAQ: MSFT) Azure handle in 2025.

Polkadot's bold ambitions may turn into big wins

Polkadot's backers have big dreams and are taking concrete steps to achieve them. Smart contract veterans like Ethereum and Solana (CRYPTO: SOL) are also stepping up their contract execution speeds and general usability, but I don't see them exploring fully functional virtual machines like the JAM protocol.

So Polkadot continues to lead the Web3 revolution from the front lines, and I can't wait to see what happens to the underlying cryptocurrency when the first real killer app emerges. Early contenders include the Brave web browser, Mythical Game group's NFL and soccer games, or the Neuroweb information-sharing platform. More likely, it's something I haven't even heard of yet.

The bottom line on Polkadot's potential

Long story short, Polkadot remains one of my favorite cryptocurrencies, despite its stalled price chart. On the upside, the low coin price could set early investors up for greater long-term returns, if and when the Web3 sea change comes in. And I don't know about you, but I think many parts of the online experience are ripe for disruption. Polkadot's Web3 supremacy looks nearly unstoppable.

Should you invest $1,000 in Polkadot right now?

Before you buy stock in Polkadot, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Polkadot wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $707,481!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 18, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Amazon, Bitcoin, Ethereum, Intel, Polkadot, and Solana. The Motley Fool has positions in and recommends Amazon, Bitcoin, Ethereum, Intel, Microsoft, and Solana. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold price shows signs of bullish exhaustion amid positive turnaround in risk sentimentGold price (XAU/USD) attracted dip-buyers in Asia on Wednesday, stalling its retreat from the $3,500 peak hit the day before.
Author  FXStreet
23 hours ago
Gold price (XAU/USD) attracted dip-buyers in Asia on Wednesday, stalling its retreat from the $3,500 peak hit the day before.
placeholder
Gold price falls further as Trump softens tone on PowellGold price (XAU/USD) is facing profit-taking pressure and nosedives on Wednesday towards $3,300 at the time of writing. The profit taking picked up on comments from United States (US) President Donald Trump, who did a 180-degree turn on his stance on China and the Federal Reserve (Fed).
Author  FXStreet
20 hours ago
Gold price (XAU/USD) is facing profit-taking pressure and nosedives on Wednesday towards $3,300 at the time of writing. The profit taking picked up on comments from United States (US) President Donald Trump, who did a 180-degree turn on his stance on China and the Federal Reserve (Fed).
placeholder
Gold sinks as risk appetite improves on Trump-Powell calm, China tariff relief hopesGold prices plunged more than 2.50% on Wednesday as risk appetite improved due to a possible de-escalation of US-China tensions and US President Donald Trump's statement that he doesn’t plan to fire Federal Reserve (Fed) Chair Jerome Powell.
Author  FXStreet
4 hours ago
Gold prices plunged more than 2.50% on Wednesday as risk appetite improved due to a possible de-escalation of US-China tensions and US President Donald Trump's statement that he doesn’t plan to fire Federal Reserve (Fed) Chair Jerome Powell.
placeholder
Trump Provides Another Boost! Tesla Shares Surge Over 5%, Leading the Seven Tech Giants!Trump has announced a partial tariff exemption for automakers. This news has lifted market optimism, resulting in a broad rally in U.S. stocks, with Tesla shining brightly. 
Author  TradingKey
4 hours ago
Trump has announced a partial tariff exemption for automakers. This news has lifted market optimism, resulting in a broad rally in U.S. stocks, with Tesla shining brightly. 
placeholder
Bitcoin Price Stabilizes After Surge — Is It Gearing Up for Another Leg Up?Bitcoin price is moving higher above the $93,200 zone. BTC is consolidating gains and might continue higher above the $94,000 zone in the near term.
Author  NewsBTC
2 hours ago
Bitcoin price is moving higher above the $93,200 zone. BTC is consolidating gains and might continue higher above the $94,000 zone in the near term.
goTop
quote