Why Ethereum, Polkadot, and Dogecoin are rallying nicely today


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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

It’s been a rather difficult market to be a crypto investor of late. But despite nearly a week of consistent selling pressure, various large-cap cryptocurrencies are recovering nicely today. Ethereum (CRYPTO: ETH)Polkadot (CRYPTO: DOT) and Dogecoin (CRYPTO: DOGE) have surged 6.3%, 6.1%, and 3.1% higher, respectively, over the past 24 hours. 

These moves come as investors appear to be buying yet another bear market dip, as enthusiasm around key catalysts such as the upcoming Ethereum merge outweigh concerns around a heated debate brewing in the Ethereum community about whether validators should effectively censor certain transactions. 

Interestingly, Ethereum and Polkadot also took the top two spots in terms of most-developed blockchain ecosystems, according to a recent report by crypto analytics website Santiment using publicly available information. Investors appear keen to focus on blockchains with consistent and sustained development growth.

Dogecoin’s price action, while more subdued than its peers, appears to align relatively closely with the overall price action of the market today.


So what

Ethereum, Polkadot, and Dogecoin are three tokens many investors watch closely as both high-growth projects and gauges of sentiment in the crypto world. Today’s interesting shift toward a more bullish risk-on perspective from investors and traders is noteworthy, and all three tokens have benefited from this catalyst. But the growth metrics supporting Ethereum and Polkadot in particular are worth considering for investors taking a long-term view.

That’s because while cryptos are difficult to value, many consider the true value of a given token as representative of the value of all projects on its blockchain. For Ethereum or Polkadot, which are tokens representing blockchains with massive ecosystems, more growth should mean, in theory, higher token prices. Continued and sustained growth over a long period of time, therefore, is important to see for investors with a long-term investing horizon.

Now what

For Ethereum and Polkadot specifically, the upcoming Ethereum merge, anticipated to take place in mid-September, is a massive catalyst. This upgrade will transition the Ethereum blockchain to a more energy-efficient proof-of-stake validation mechanism. Doing so carries great potential for improved efficiency over time, albeit with some specific risks.

While both tokens have rallied substantially off their June lows, it’s clear the market is still taking a wait-and-see approach to how this merge will pan out. Despite today’s bullish price action, some investors could be inclined to stay on the sidelines.

Although I think this upgrade should be a net positive, there are certainly risks involved for these tokens. Accordingly, it will be interesting to see how these tokens perform in the weeks to come.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.


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