How to buy Polkadot (DOT) cryptocurrency?

What is Polkadot

Polkadot is a software program that aims to encourage a global network of computers to run a blockchain from which users can launch their own blockchains. Polkadot was launched in 2020 and it offers a variety of innovative technical features. It aims to build an ecosystem of cryptocurrency. Other competing blockchains are Ethereum (ETH), Cosmos (ATOM), and EOSIO.

Unlike Bitcoin, Polkadot is called a multi-chain network because it can connect all networks.

Its ultimate goal is to serve as a framework for all blockchains, much like HTML allows websites, browsers, and servers to interact with one another. It is designed to simplify complicated and expensive cryptocurrency mining processes, including validation of transactions, and allow developers to concentrate on creating decentralized applications (DApp).

Polkadot operates on two types of blockchains. One is the main network called a relay chain, on which transactions are permanent. The other is a user-created network called parachains.

Parachains can be tailored for any purpose and fed into the main blockchain. This ensures that parachain transactions enjoy the same security as the main chain.

The Polkadot team believes that transactions can be kept safe and accurate by using the bare minimum of computing resources. At the same time, users have the advantage of being able to customize parachains to suit their needs.

This design, according to Polkadot, will allow its users to perform transactions more privately and efficiently. It will also create blockchains that don’t reveal user data to the public or process a larger number of transactions. Polkadot native cryptocurrency, DOT, lets holders vote on possible code changes and then upgrades across the network if there is consensus.

Polkadot raised approximately $200 million in two-round sales of its DOT cryptocurrency. This makes it one of the most successful blockchain projects, yet.

Privacy is important for individuals, and not only businesses. Big data mining companies like Facebook can make it easy for you to disclose your financial and spending data.

As crypto exchanges have become more accessible and the DOTUSD price has risen, more people have begun to invest in cryptocurrency. Polkadot trading is allowing a great transfer of wealth and even new investors can hope to profit from its fast growth and earn higher returns than they would on the stock market.  

With so much attention from the media and financial traders, new cryptocurrency investors are always looking for advantageous ways (platforms) to buy Polkadot (DOT) online. Luckily, there are numerous services and guides on how to buy Polkadot to help you get started in the cryptocurrency market. 

Such multi-asset platforms hand investors many useful financial instruments that can generate a passive income (interest with forex trading or dividend with stock trading). 

Buying Polkadot (DOT) over an exchange 

If you want to participate in a crypto project development and own the digital asset, you can buy Polkadot (DOT) online through a cryptocurrency exchange, such as Binance, Kraken, Bittrex, or Coinbase, and store it in a digital wallet.  

Having an account on a cryptocurrency exchange allows you to send and receive Polkadot (DOT). Transferring Polkadot is like the way traditional bank transfers work, except for the bank account address, which is replaced with a Polkadot address. Because digital currency is transmitted directly between individuals without needing third-party entities, such as banks, transaction fees are cheaper than those charged by traditional institutions. 

If you want to hold your crypto for a longer time, it is advised to transfer them from the crypto exchange to a secure cryptocurrency wallet. Wallets are much safer, and each private crypto wallet has a private key. It is critical to keep your private key safe because you won't be able to access your crypto without it, and if it's easily available, your funds could be stolen. 

The good news is that investors can limit the risks presented by the crypto exchange by trading Polkadot (DOT) with contracts for difference (CFDs). Polkadot (DOT) CFDs allow you to speculate on the price of the cryptocurrency without having to own the digital asset.

Read on if you want to learn to trade Polkadot with capex.com in the most convenient way. 

Buying Polkadot (DOT) with an Online Broker 

Trading Polkadot (DOT) with an online broker like CAPEX means that instead of owning Polkadot outright, you’ll be speculating on its price with CFDs.  

The main difference between buying Polkadot (DOT) from an exchange and buying Polkadot (DOT) from an online broker is that you don’t own Polkadot (DOT) when you use a broker. Owning crypto requires investors to have a crypto wallet, either within the exchange or a private wallet. But when you purchase Polkadot (DOT) CFDs using an online broker, the CFDs are stored in your account and are far more liquid, which makes trading CFDs more popular. Unlike cryptocurrency exchanges, online CFDs brokers are regulated by financial authorities.   

The Alternative Way to Invest in Polkadot (DOT)  

Trading CFDs is a process of buying or selling CFDs and can generate a profit if the value of the asset moves in the direction of the investor’s prediction, or a loss if the market goes against him. 

You can buy Polkadot CFDs (go long) if you believe the value of the digital asset will increase.  

At the same time, you can “go short” if you believe that the price of the underlying asset, in this case, Polkadot (DOT), will decrease, by selling CFDs. 

Trading CFDs provides leverage, and you can open your position by depositing only a margin.  

For example, if a trader wants to buy 100 Polkadot CFD at $36 would only require $1800 of trading capital. 

It’s important to remember that leverage can increase both your profits and your losses, and they will be based on the full exposure of the trade, not just the margin requirement needed to open it. Potential losses, as well as profits, could exceed your margin. 

Concisely, if you choose to trade crypto CFDs, you can profit from the difference between the buying and the selling position.  

With CAPEX, you can trade CFDs on futures or spot prices. Trading CFDs on futures gives you exposure to the futures market, but without requiring you to take on any obligations or worry about any of the other nuances that are associated with futures trading. 

Buy Polkadot DOT CFDs - Go Long

Instead of taking ownership of Polkadot, you can place a ‘long position’ translates to buying Polkadot CFDs. Your position, or Polkadot CFDs, will increase in value according to the increase in the price of the digital asset Polkadot’s price increases. If the price of Polkadot falls, then your position will lose value and can lead to loss. 

Let’s assume that Polkadot is trading at a sell/buy price of 36.00/36.30 USD. You want to buy 100 CFD (units) because you think the price of Polkadot will go up. Polkadot has a 1:2 leverage or a margin rate of 50%, which means that you must deposit only 50% of the position’s value as position margin. 

In this example, your CFD position margin will be $18,150 (50% x (1000 units x $36.30 buy price)). Losses greater than the margin can occur if the price of Polkadot moves against your position. 

Outcome A: a profitable trade 

If your prediction was correct, and the price of Polkadot surges over the next hours or days, then you have made a profitable trade. If the sell/buy price is 40.30/40.60 USD when you decide to close your position by selling at 40.60 (the new sell price), then your profit will be $4,000. 

The price has moved $4 (40.30 - 36.30) in your favor. Multiply this by the size of your position (100 units) to calculate your gross profit which is $4,000. 

If the position was closed during the day, there will not be any swap charges and the net profit is $4,000. 

Outcome B: a losing trade

If your prediction for the price of Polkadot was wrong, the Polkadot CFD trade will result in a loss. Let’s assume that the price of Polkadot drops over the next hour to a sell/buy price of $37.30/37.60. Because you want to limit the loss in the eventuality that the price continues to drop, you can sell at $37.30 (the new sell price) to close the position. 

The price has moved $1 (37.30-36.30) against you. Multiply this by the size of your position (1000 units) to calculate your loss, which is $1,000. 

Sell Polkadot DOT CFDs - Go Short

In this CFD example, Polkadot is trading at a sell/buy price of 36.00/36.30 USD. Assume you want to sell 500 CFDs (units) because you think the price will go down. Polkadot has a 1:2 leverage or a margin rate of 50%, which means that you only must deposit 50% of the position’s value as position margin. 

In this example, your CFD position margin will be $9,000 (50% x (500 units x 36.00 sell price)). Remember that if the price moves against you, it is possible to lose more than your initial position margin of $9,000. 

If you are not ready to trade CFDs at spot or futures prices yet, we have also got educational resources like CAPEX Academy with free courses on how to trade. Plus, we offer a demo account – giving you $50,000 in virtual funds to build your confidence in a risk-free environment. 

Investing in Polkadot without actually buying Polkadot  

While buying and day trading cryptocurrency is a major trend right now, it is important to remember that cryptocurrencies are a volatile and risky investment choice. If investing in crypto on an exchange or via a broker does not feel like the right choice for you, here are a few options to indirectly invest in Polkadot and other cryptocurrencies: 

Exchange-Traded Funds - Crypto ETFs 

Exchange-traded funds (ETFs) are popular investment tools that allow investors to buy exposure to hundreds of individual investments in bulk. That is why ETFs are a means of diversification for your portfolio and as less risky than investing in individual investments.  

A crypto ETF allows investors to trade cryptocurrency on a traditional market and eliminates the need to trade the asset on a crypto exchange. Another advantage of trading crypto ETFs is that investors do not have to worry about the security aspects of trading crypto.  

US investors can enter the crypto market by using ProShares Bitcoin Strategy ETF (BITO). The Fund provides capital appreciation through managed exposure to bitcoin futures contracts. 

A Polkadot ETF could come in 2022. The approval of a Bitcoin ETF means a similar offering for Polkadot is imminent.  

>> Learn what is an ETF and how does it work 

Companies Connected to Polkadot and Cryptocurrency - Polkadot Stocks

Another option is to invest in cryptocurrency indirectly by investing and buying shares of companies that offer real-life products and services but still use or own cryptocurrencies as part of their business model (known as Polkadot stocks). With an all-in-one trading account with CAPEX, you can also trade shares CFD of public companies like:  

• Goldman Sachs (GS). This leading global investment banking, securities and investment management firm listing includes Coin Metrics, a provider of blockchain data to institutional clients. Learn how to buy Goldman Sachs shares
• Coinbase (COIN). Coinbase is a cryptocurrency exchange that allows consumers, financial institutions, and businesses to transact between fiat and cryptocurrencies and securely store and use cryptocurrencies. Learn how to buy Coinbase shares
• Microsoft (MSFT) is offering Ethereum Blockchain as a Service (EBaaS) on the Microsoft Azure cloud. It is intended to offer Enterprise clients and developers a single click cloud-based blockchain developer environment. Learn how to buy Microsoft shares
• Barclays (BARC). The British multinational's list of investments includes RealBlocks, a tech platform that connects advisors and investors to alternative investment managers. Learn how to buy Barclays shares
• CME Group (CME). CME is a financial derivatives exchange that offers trades in cryptocurrencies as well. In Q3 2021, the company reported a 14% year-over-year increase in its average daily volume (ADV) at 17.8 million contracts. Learn how to buy CME shares

CAPEX Web Trader 

Trade on one of the most complete, fully customizable trading platforms on the market. 
 
Available on desktop (Windows, Mac) and mobile (Android, iOS), it provides intuitive, web-based access to a vast range of tradable instruments, charting tools, analytical tools, and many more features. 

To view Polkadot's real-time price and chart on the trading platform can click on the "Search" icon located in the left panel or by clicking on "Cryptocurrency" and then select the instrument, in this case, Polkadot (DOT). 

>> Launch Web Trader 

MetaTrader 5 

MetaTrader 5, one of the best crypto trading apps, is providing superior tools for comprehensive price analysis, use of algorithmic trading applications (trading robots, Expert Advisor), and copy trading. 

MetaTrader 5 is available on both desktop and mobile.  

>> Download MT5 

Step 3: Pick up a Polkadot trading strategy 

Additionally, you can pre-define Stop Loss and Take profit orders, which are crucial risk management tools – that help you minimize the potential loss and maximize the potential gains. 

How to buy Polkadot with Market Orders 

The simplest type of trade order is a market order. Market orders are usually placed by traders if they want to be certain trade is executed. A market order is instant. Therefore, it is simply an order placed by a trader to buy or sell Polkadot immediately at whatever its current price is.  

I want to buy 200 Polkadot (DOT) right now or as quickly as possible. 

How to buy Polkadot with Limit Orders 

While a market order is simply an order placed by traders to buy or sell an asset immediately at whatever the current price, a limit order in its most basic sense, is an order to buy or sell an asset at a specific price. Buy limit orders are placed above key support levels with the purpose of limiting price risks anticipating the uptrend will resume after a correction (buy the dip).  

The price for DOT/USD is currently at USD 36.00 and you place a buy limit order at USD 31.00, then your order is meant to execute at the price of USD 31.00 as soon as there is a matching sell order at this price or better. 

How to buy Polkadot with Stop Orders 

A stop order is an order that becomes a market order only once a specified price is reached. It can be used to enter a new position or to exit an existing one. Limit orders are placed above key resistance levels anticipating a breakout after a consolidation. 

The price for DOT/USD is currently at USD 36.00 and you place a buy stop order at USD 37.50, then your order is meant to become market at the price of USD 37.50 as soon as the price is reached. 

Step 5: Monitor and close your Polkadot position 

To open a Polkadot trade, you’d buy if you thought that the price was going to rise or sell if you thought the price was going to fall. Once your trade is open, you’ll need to monitor the market to make sure that it’s moving in the way you anticipated. 

The technical indicators available on our trading platform can help you to determine what Polkadot’s price might do next. Indicators can also help you monitor current market conditions like volatility levels or market sentiment. 

CAPEX WebTrader can deliver an in-depth analysis of the charts and offers over 90 indicators (including moving average, MACD, RSI, and Bollinger Bands). The WebTrader platform also supports an interactive trading activity with high-end research tools helping you interpret market data.  

Take Profit & Stop Loss

Traders can close a position immediately to take a profit or to cut a loss. You can use market order or set Stop Loss and Take Profit levels when you set the order to buy Polkadot.  

The platform offers the stop-loss option, which lets you clearly state how much you're willing to risk with your trade. Similarly, the take profit is the exact opposite. It tells your broker how much you expect to make as a profit and when you want to close your position. 

Any profits you make will be paid directly into your trading account. Losses are deducted from your account balance. 

When to buy Polkadot (DOTUSD)

Investors should be aware of the fundamental and technical analysis when deciding when to buy Polkadot. The fundamental analysis considers the news and events about the coins, exchanges, and other crypto businesses. The technical analysis uses the price value history to map the evolution of the supply and demand for Polkadot. 

Polkadot Price Prediction using Fundamentals 

When using the fundamental analysis approach, investors should be aware of the government regulation, latest cryptocurrency updates, and technical issues, as well as cryptocurrency exchanges that affect the supply and demand for cryptocurrencies.  

For instance, when Bitcoin CME was introduced into the government regulations, and it drove the price of Bitcoin to almost $20,000 in December 2017. 

What is the future of Polkadot? 

Polkadot, a highly ambitious project that aims to transform the structure of the global internet, is very ambitious. Experts consider it a revolutionary solution that could revolutionize the blockchain industry. The project also has many advantages that make it attractive to investors.

However, there are some drawbacks to the project. The project's complexity can pose a problem for developers looking to connect to their blockchains with the project.

The latest Polkadot news is that founders Gavin Wood & Robert Habermeier announced that the network is now ready to support its first Parachains. This final phase of its multi-phased process, which began on 26 May with the launch of the initial proof of authority version of the Polkadot Relay Chain. On 11 November, the first parachain auction took place. The Polkadot on-chain governance approved the first series of auctions that will be held every week until March 2022.

The DOT token was listed on major cryptocurrency exchanges in August 2020. Soon after, the price began to rise. It reached a high of $6.862 on 1 September 2020. The price dropped quickly, reaching a low of $3.532 in September. The price began to fluctuate between $3.60-6.10. This trend continued through the end of the year. The price finally broke the $6.10 resistance on 28 December and reached $9.51 the next day.

Because is difficult to analyze the intrinsic value of a cryptocurrency, it is recommended you perform a technical analysis before investing in Polkadot CFDs. It might offer some insight into the past movements of Polkadot, helping you predict where it will head in the future. 

Polkadot price prediction using technical analysis 

Some believe the high concentration of retail traders makes cryptos truer to traditional chart patterns and indications of oversold, overbought conditions, etc. 

Technical analysis techniques can be applied to any market where the price can freely fluctuate, and data is available to see those fluctuations. The CAPEX Web Trader has a full suite of all the best-known technical indicators and chart drawing tools. 

>> Polkadot price prediction for today 

Polkadot Forecast 2022  

Price action indicates that DOT appears to be in a downtrend movement. DOT price violated the key support level 38.50-39.00 (trendline and the previous high), which signals the bearish momentum is more likely to continue. 

The 2022 Polkadot price prediction is the $27 level (50% Fibonacci retracement) on the bearish side and $73-75 level (161.8% extension of the previous leg up).

However, bulls may feel more confident to apply liquidity above the $40 level if the DOT price can recover the trendline.

TradingBeast predicts that Polkadot will be ranging between the $27 and the $36 levels. They don't believe that DOT's prices will drop further in 2022, so they aren't optimistic about their prediction.

WalletInvestor disagrees and believes that Polkadot's price will not fall. Their analysis shows that the price of Polkadot will remain stable at $34.58 by the end of 2021, $74.90 by 2022, and $194.73 after 2025.

LongForecast's DOT price forecast is also bearish. They predict that Polkadot will see a drop in price by November 2021, before it begins rising. LongForecast's calculations show that the price of Polkadot will drop to $19.03 by the end of 2022. Long-term forecasts indicate that prices will stagnate at $18.50.

In conclusion, should you Buy Polkadot or not? 

As with any investment, make sure you carefully assess your financial situation before investing in cryptocurrency, Polkadot, and the stock market. Polkadot can be extremely volatile—a single tweet can make its price plummet—as cryptocurrencies are still a highly speculative investment. Follow the already famous crypto investment phrase — "invest only what you can afford to lose". 

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