I asked ChatGPT its 2024 predictions for Polkadot, the response was fairly amusing
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
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Polkadot [DOT]’s ecosystem continues to expand as more parachains developments come onboard. In March 2023, more than 20 parachains were added to the Polkadot ecosystem, according to the second edition of Parachain Dispatch. The new projects include Ajuna Network, Astar Network, and Bifrost Finance, among others.
These new parachain developments could add upward pressure to DOT’s token value as they drive demand. Notably, a project team must win a Polkadot parachain slot auction to be connected to the core network. The parachain slot auction is settled in DOT tokens, and the project team could seek DOT from individual holders through a crowdfunding process known as “crowd loans” to help secure the slots.
To understand the potential impact of these new developments on DOT’s value, we tapped into ChatGPT to get more nuanced insights and gauge the AI model’s apprehension of Polkadot’s ecosystem.
Polkadot [DOT] ecosystem – ChatGPT Analysis
Starting off with the basics, we asked ChatGPT to explain what Polkadot is and how its ecosystem works –
In summary, ChatGPT stated that,
“Overall, Polkadot’s ecosystem is designed to foster innovation and collaboration between different blockchains, providing a flexible and scalable platform for developers to build a wide range of decentralized applications”
The “decentralized applications” are also known as “parachains.” The Polkadot ecosystem added 21 of these parachains last month, and each project team must win a parachain slot auction to gain access to the core system for a specified period of time. It is like paying for a lease over a certain agreed duration.
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To further gauge the AI model’s understanding of the Polkadot, we asked it how parachain slot auction works –
The “crowd loan” structure of sourcing DOT tokens involves “staking” to help a project win an auction. This, simply put, is intriguing. Because of the current U.S regulatory pressure on crypto-staking, anything structured in a manner that involves “staking” could attract regulatory scrutiny. For example, Coinbase recently received a Wells Notice from the SEC. And, one of the objects of the potential lawsuit is reportedly its crypto-staking service.
So, we asked ChatGPT what crowd loan is and its legal standing in the U.S. The explanation was apt, but the AI model couldn’t affirmatively state whether crowd loans are legal in the U.S.
Here is ChatGPT’s analysis of the legality of crowd loans in the U.S –
At this point, one thing is crystal clear. Parachains developments can drive demand for DOT tokens because project teams need them to win a parachain slot auction. Based on this fact, how will the 21 newly added parachains impact DOT’s value?
This was the AI model’s answer –
We needed to put a figure on the above possible upward pressure on DOT’s value due to the added parachains. So, we pulled historical price data on DOT to help make future price predictions.
Some of the results issued by ChatGPT were inaccurate, with a wide deviation from price data collated from TradingView.
For example, ChatGPT stated that DOT hit a high of $52 in December 2021. On the contrary, TradingView’s data showed it at a high of $39 on December 1, 2021.
The AI model is restricted from making price predictions, so we unshackled it through jailbreak techniques to get modest price prediction values for DOT. We had to ask the AI model to break down DOT’s historical price data in 2021 to use it for the predictions.
Surprisingly, the results were different from the previous output.
The results noted a little deviation from TradingView’s data, compared to the previous output. The jailbreak version is known to give outrightly false information, but this particular instance was slightly different.
On the other hand, the classic version resorted to attaching a direct link from CoinMarketCap to help track historical price data.
However, it is worth noting that the AI model tracks different sites to collate data on cryptocurrency prices. These sites sometimes have different real-time price values of crypto-assets and could explain the price deviation witnessed in the initial and second outputs.
Next, we nudged ChatGPT to predict DOT’s price by the end of 2023 and 2024 based on the above historical price data. Although the classic version put forth its typical disclaimer, the jailbreak version predicted DOT’s price to hit a modest $10 by the end of 2023.
We stretched ChatGPT to extrapolate the same data and give a modest average value of DOT by the end of 2024. The AI model set DOT’s price at $20 by the end of 2024.
The AI model set DOT’s price above $600 by the end of 2024, which looks not very realistic given the current situation of the coin. The previous year, the price for DOT was $26.72.
The Polkadot traded lower after a month, hovering around $19. The DOT currency saw a significant decline after reaching its ATH of $55 in November of last year. Polkadot, on the other hand, has made respectable growth since the start of this year.
The DOT cryptocurrency may cross the $8.88 price level by 2024 and reach a 23.60% FIB milestone if it trades higher.
Not everyone has the patience to wait for long-term prospects. So, what does DOT’s short and mid-term prospects look like? The daily chart could offer some cues.
Is $7 reachable?
At the time of press, DOT was trading at $5.65, reflecting a bearish price movement for the past seven days. The RSI (Relative Strength Index) was below the 50 mark – another bearish signal that could push DOT’s price south.
The Chaikin Money Flow (CMF) index was negative, showing sellers had leverage in the market. With the OBV (On Balance Volume) also registering a downtick, a drop in trading volume could push DOT further below the $5 price mark.
In conclusion, DOT seems bearish in the short term, as shown by its RSI being below the 50 mark. Alas, the mid-term prospects could only be bullish if the price moves above the $7-price mark.
ChatGPT has an apt understanding of the Polkadot ecosystem and how its parachains development could impact DOT’s value in the future.
Based on recent developments and overall market sentiment, ChatGPT forecasted that DOT’s price in 2023 and 2024 could hit $500 and $672, respectively.