(GBTC) – Polkadot Outperforms Bitcoin, Rival Ethereum To Join The Top 5 Cryptos: What You Need To Know

Polkadot (DOT) outpaced the weekly gains made by both Bitcoin (BTC) and Ethereum (ETC) to emerge as the fifth-largest cryptocurrency by market capitalization, as per CoinMarketCap data.

What Happened: Polkadot surged 49.74% on a 7-day basis, while Bitcoin and Ethereum gained 0.49% and 9.29% at press time.

DOT had left behind XRP in terms of market cap on Thursday to become the fourth-largest cryptocurrency by market cap.  The cryptocurrency has since then settled for the number five spot.

XRP has a market cap of $13.33 billion, while DOT’s is $12.43 billion. 

At press-time XRP was trading 0.57% at $0.29, while DOT soared 21.24% at $13.95. 

Why It Matters: The buzz around scalable blockchain networks and hype surrounding Decentralized Finance (DeFi) are factors that have led to the price appreciation in DOT, reported Cointelegraph. 

The cryptocurrency co-founded by Gavin Wood — also a co-founder of ETH — rivals Ethereum as it allows smart contracts to be implemented in an ecosystem comprised of smaller blockchains.

See Also: Why This Ethereum Alternative Is Grabbing Eyes Amid Crypto Markets Carnage

Polkadot is said to have the ability to process data in a more efficient manner, allowing for decentralized applications to run without facing scalability issues, as per Cointelegraph. 

The cryptocurrency is likely to support large-scale DeFi protocols in the future along with dApps. 

Some traders in Asia are using DOT prices to forecast prices of BTC and point to a parallel with another EOS, which was used to foretell Bitcoin prices in the 2017 bull market, reported CoinDesk.

After BTC peaked out in 2017, many investors and traders moved their profits into EOS, which lead to that coin reaching its all-time high at end of April 2018. 

DOT reached its all-time high of $14.86 on Thursday.

Price Action: BTC traded 2.92% higher at $38,395.79 and ETH traded 9.29% higher at $1,205.81 at press-time. On Thursday, Grayscale Bitcoin Trust (OTC: GBTC) closed 7.88% higher at $43.53.

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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