Is Polygon a Good Investment? It Depends on What You’re Looking For

Is Polygon a good investment? It’s a sensible enough question. But the answer isn’t so clear cut. It really boils down to what kind of investor are you.

Polygon (MATIC) has seen some impressive gains over the last 12 months. It’s up more than 300% compared to this time last year. It’s vastly outpaced its crypto big brothers like Bitcoin and Ethereum during that time frame. But since the big Polygon price spike in May of 2021, its price has largely moved in lockstep with the crypto markets as a whole.

There’s an argument to be made that this is both good and bad news for investors. Polygon saw a massive upsurge in daily active users last year. From January to May the number of users went up more than 20 times. Coincidentally, this happened at the same time crypto bears came out of hibernation and pushed the price of Bitcoin down by as much as 35%.

But there was good reason for that surge in users. You see, Polygon is an Ethereum-based project. It was designed to address issues on the Ethereum blockchain. These were namely scalability and interoperability. In fact, it was the first such project that actually solved some of these issues.

Because Polygon (formerly known as Matic) has added improved functionality to the whole Ethereum blockchain, it has become a go-to for developers. Since then, it’s been hailed as the “next big thing” in crypto by analysts, developers and yes, some social media influencers. So is Polygon a good investment? Is it going to the moon? Hold your horses.

Is Polygon a Good Investment Long Term?

The short and simple answer is yes… If you believe that Ethereum will play an important role in the development of Web 3.0.

That’s because Polygon has quickly proven its worth. Elements of its ever-expanding product portfolio have become mainstays for developers. They allow easy access to scaling, data availability and infrastructure solutions.

Furthermore, Polygon has helped to significantly reduce gas fees. Ethereum’s high fees are well documented. And it continues to rise. For instance, last year a $200 transaction on Ethereum would have cost around $5. But on Polygon, it only costs around $0.001.

On top of this, more than 3,000 decentralized apps (dApps) are now hosted on Polygon. It’s helped process billion of transactions. And it’s helped to safeguard more than $5 billion in assets. Polygon is the real deal. That’s why we saw such a noticeable bump in price last year.

But again, since then, there haven’t been any big catalysts that led to sustained growth. Its price has moved mostly in line with the crypto markets as a whole. That’s not to say there haven’t been big announcements. There have been.

The Associated Press has begun using Polygon to mint its NFTs. But that barely registered. Polygon also recently raised $450 million through a private sale of its native token. But despite that sizable investment the value of MATIC barely moved. Nonetheless, when it comes to the question of “is Polygon a good investment” we still think it is. But that’s because we believe that crypto as a whole will go on another bull run. Just not this year.

The Short-Term Prognosis

If you’re looking for the next moonshot crypto that will turn $100 into millions this year, Polygon (MATIC) probably isn’t it. It could be a fun token to try day trading crypto. But that’s just due to the inherent volatility of the crypto markets. It’s no better or worse than any other established token for this.

Even though the news cycle can play an outsized role in the prices of crypto, Polygon has remained as steady as almost any token out there. Right now, it’s trading around $1.40. And we wouldn’t be surprised if that was still the case at the end of the year. Naturally, there’ll be some incremental gains and losses along the way. But we’re not banking on it being more than a store of value short-term.

General investors have seemingly lost interest in cryptocurrencies. That’s likely because a lot of investors got in when the markets were red-hot. An estimated 70% of crypto holders in the U.S. entered the market in 2021. And those left holding the bag since last November’s highs are likely a bit salty.

That’s why we’re anticipating a pretty quiet year for all things cryptocurrency. But there is still a big catalyst on the horizon…