The Polkadot price is hovering near its all-time high ahead of a major event that will start on Thursday this week. DOT is trading at 51.57, which is close to its all-time high of $55.51. Similarly, the Kusama price is trading at $460, which is a few points below its all-time high of $520.
Parachain auctions
Polkadot and Kusama are two of the biggest blockchain projects in the world. DOT and KSM, their native tokens, have a combined market capitalization of more than $54 billion.
The two blockchain projects were developed by Gavin Wood, who is also the co-founder of Ethereum. They are also interrelated because Kusama is usually the first place where developers start when building on Polkadot.
All Polkadot projects must pass through Kusama. In the past few months, however, we have seen many developers build their projects and leave them in Kusama.
Another unique feature of Polkadot is that projects must pass through what is known as a parachain auction. In these auctions, the community members vote for their favourite projects by staking their DOTs and KSMs.
Therefore, the Kusama and Polkadot prices are in the spotlight ahead of the parachain auctions that will kick-off on Thursday. Analysts believe that Acala Network will be the eventual winner.
Indeed, the developers announced that they had raised 805 million DOTS in a crowdloan. The fundraising was worth more than $400 million. Since this is a loan, the developers will need to pay it back to the investors. These investors received ACA token, which they can stake and the Liquid Crowdloan (IcDOT).
Kusama and Polkadot price prediction
So, what next for the Polkadot and Kusama prices? Ideally, as I have written before, the prices of the two coins could keep rising ahead of the parachain auctions.
In reality, however, this is not guaranteed. See, while the two prices have surged ahead of the auctions, there is no guarantee that they will rise when the auctions start. This is because of something known as buying the rumour.
It simply means that the investors tend to buy an asset when they are anticipating something major and then exit it when it happens. For example, this week, Bitcoin and Ethereum prices surged ahead of Coinbase earnings. They then declined when the earnings happened.
Therefore, I suspect that the Kusama and Polkadot prices will maintain a bullish stance when the auctions start. They will then retreat when the auctions gets underway.
