Polkadot’s native token, DOT, has faced a steep decline, trading near $3.3 after failing to regain its 2021 peak of $55. The token has lost nearly 94% of its value, reflecting weak market confidence despite network upgrades and staking incentives. Network activity has also declined, with transaction volumes falling sharply in early 2025. However, potential catalysts like Bitcoin reserve proposals and ETF filings could offer a path to recovery.
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DOT Crashes 23% in Last Month
In the last month, DOT saw a brief rise above $4.32 before losing 23%, falling back to $3.4 range. It now trades in a persistent down-channel with technical indicators such as RSI and MACD signaling minimal momentum. Short-term recovery appears unlikely under current market conditions.
The slump has been accompanied by fading optimism, as key upgrades have failed to boost the token’s value or attract new users.
Inflation linked to staking is another factor pressuring prices. With around 55% of DOT locked up, liquidity remains limited. When sentiment dips, sell pressure from those unstaking adds to the decline. Meanwhile, Ethereum’s layer-2 networks and Cosmos continue to attract more user and developer activity. Polkadot, despite a strong technical design, is losing ground in adoption compared to its rivals.
Polkadot’s Network Activity Crashes 37%
According to the State of Polkadot – Q1 2025 report from Messari, overall network use has dropped sharply. Total transactions across the chain stood at 137.1 million during the first quarter, which is a 37% fall from the previous quarter. Monthly active addresses also declined from 610,000 to 529,900, representing a 13% loss.
This activity dip coincides with changes tied to the Neuroweb module rollout, aimed at improving how data is handled on-chain. However, the immediate outcome was fewer on-chain interactions. Market data shows that DOT’s market cap fell from nearly $8 billion at the start of the year to $6.1 billion by March-end. It further declined to $5.14 billion by late June.
While some parachains did report increases in transactions – such as Moonbeam, Mythos, and Peaq – their success is isolated. Moonbeam handled 16.7 million transactions in Q1 (up 6.5%), Mythos processed 12.3 million (up 12%), and Peaq saw a significant rise of 84% to 10.1 million. Still, these gains didn’t affect the core network trend, which points toward disengagement.
Polkadot’s Tech Isn’t Saving It Anymore
Polkadot now faces not only statistical decline but also a reputational shift within the crypto sector. Popular trader Nonzee summed up this shift in a social media post, saying:
“Polkadot proves that technology is not enough. It built the chassis of a Web3 super-system, but without users, slow adoption, developer disengagement, and market freeze, it looks like a ghost town.”
He also described DOT as “a top-tier technological engine with no car to power”. Many early supporters, once optimistic about the chain’s interoperability goals, now question its future. Recent upgrades such as Agile Coretime and Elastic Scaling have failed to drive long-term growth. The gap between development output and real-world adoption continues to widen.
ETF Filings and Bitcoin Reserve Debate
Institutional exposure to Polkadot has seen an uptick, especially after 21Shares and Grayscale submitted ETF filings for DOT earlier this year. Nasdaq formally accepted 21Shares’ listing proposal for a spot DOT trust. These filings briefly lifted DOT’s price by about 4%, but the effect was short-lived.
Still, some external events could influence DOT’s direction. One of the more divisive recent events was a community debate over allocating 500,000 DOT (worth over $1.7 million) to acquire tBTC through dollar-cost averaging. Proponents argue this would help stabilize the ecosystem by linking it to Bitcoin reserves, while critics see it as distracting from the project’s native goals.
At the national level, interest in Bitcoin as a digital reserve asset is growing. A March 2025 executive order in the United States established a Strategic Bitcoin Reserve and Digital Asset Stockpile using seized crypto. This fund, holding over $20 billion in BTC, reflects a major policy shift and has given some support to the broader digital asset space, including projects like Polkadot.
U.S. states such as Texas, Arizona, and New Hampshire are also building their own Bitcoin reserves. Texas alone passed a law to fund a $10 million reserve using unclaimed cryptocurrency. These moves strengthen the view of crypto as a legitimate store of value and may boost general trust in alternative chains.
Read also: Polkadot Debates Bitcoin Reserve Plan as DOT Struggles to Rebound
No Quick Fix for Polkadot’s Price Challenges
Polkadot remains a project with deep technical roots, but it has failed to turn that foundation into consistent adoption. Its token price has dropped almost 94% since 2021, and recent attempts at recovery have all lost steam. Transaction volumes and user counts are both falling, while sentiment among investors and developers is shifting away.
Upgrades like Neuroweb and strategic ideas such as Bitcoin-backed reserves or ETF exposure show some creative thinking, but results have yet to materialize. Unless Polkadot can turn these concepts into sustained user growth and liquidity, its price is likely to remain low.
