DAI price prediction: Is DAI coin a good investment?

Author: Peter Henn

As a stablecoin that aims to help people access loans, what is the DAI price prediction?

DAI logo set against a blue background
As a stablecoin, DAI is linked to the value of a fiat currency – Photo: Shutterstock

Contents

DAI is a cryptocurrency that has had a lot of people talking recently. Where is it going?

Here, we will tell you a little about the DAI coin itself, as well as looking at its price history, before we discuss what people are giving as a DAI price prediction for 2022 and beyond.

All about DAI

DAI is one of two native tokens of the MakerDAO network. The other is called MKR, and acts in much the same way as a lot of other cryptos, in that it is a governance token.

MKR holders can vote on proposed changes to the network. The more MKR you hold, the more voting power you have. Also, MKR works as an investment in MakerDAO itself. If you hold MKR, you can, in effect, loan it out. The interest people generate from loans of MKR is used to buy MKR and then burn the tokens. Token-burning creates scarcity, which should, in theory, keep the price of MKR sustainable.

DAI is a little different because it is not a conventional cryptocurrency that can, theoretically, be incredibly volatile. DAI is a stablecoin. This means it is linked to the value of a fiat currency. In the case of DAI, it is pegged to the US dollar.

So, ideally, the price of the DAI cryptocurrency should stay pretty flat, close to or – even better – at $1. This does not always happen, as we will see later, but there isn’t much volatility in the value of DAI, at least when compared to other non-stable cryptos. This is worth keeping in mind when it comes to making a DAI price prediction. 

MakerDAO was founded in 2014 by Danish entrepreneur Rune Christensen. It is what is known as a digital autonomous organisation, or DAO, which is a program, almost always based on the Ethereum blockchain, that has a built-in ability to help people manage their code. It is used in decentralised finance (DeFi), the concept that is ultimately behind cryptocurrency’s success.

DeFi enables people to make financial transactions that bypass banks. This, in theory, benefits those who do not have a bank account – such people currently number around 1.7 billion, according to the World Bank – and helps people transfer money internationally without having to pay commission fees and remittance service charges.

MakerDAO was set up to enable people to take out loans using cryptocurrency as collateral. The loans themselves are made in DAI. Because MakerDAO backs the DAI coin itself, DAI is different from a lot of stablecoins, which are backed by a private company. While MakerDAO is not publicly owned, it is decentralised – there is no single person in control and decisions are made by the people who hold the MKR token. 

If you want to know how DAI is able to stay close to the value of the dollar, it is because MakerDAO has set up a series of smart contracts. These are computer programs with an agreement that is automatically executed once the terms are met. In this case, the smart contract executes to make sure the value of the DAI crypto neither gets too high nor too low.

It is also worth bearing in mind the fact that DAI, which is used in loans, does generate a rate of interest, so people who hold the coin can generate a profit from that, too. 

According to their white paper, DAI is “resistant to hyperinflation due to its low volatility” and offers “economic freedom and opportunity to anyone, anywhere” – an appealing prospect for many investors.  

DAI/USD price history

Date Close Change Chg% Open Min. Max.
2022-09-30 0.9972000000000001 0.0000 0.00 0.9972000000000001 0.9971000000000001 0.9974000000000001
2022-09-30 0.9973000000000001 0.0001 0.01 0.9972000000000001 0.9963000000000001 0.9981000000000001
2022-09-30 0.9975 0.0006 0.06 0.9969 0.9965 0.9986
2022-09-30 0.9969 -0.0006 -0.06 0.9975 0.9949 0.9982000000000001
2022-09-30 0.9977 0.0007 0.07 0.997 0.9962000000000001 0.9985
2022-09-30 0.9969 -0.0011 -0.11 0.998 0.9965 0.9986
2022-09-30 0.9979 -0.0006 -0.06 0.9985 0.9974000000000001 1.0006
2022-09-30 0.9987 0.0002 0.02 0.9985 0.9979 1.0007
2022-09-30 0.9986 0.0001 0.01 0.9985 0.9985 0.9999
2022-09-30 0.9986 0.0001 0.01 0.9985 0.9984000000000001 0.9996
2022-09-30 0.9986 0.0000 0.00 0.9986 0.9982000000000001 0.9997
2022-09-30 0.9985 0.0000 0.00 0.9985 0.9976 0.9995
2022-09-30 0.9985 0.0000 0.00 0.9985 0.9977 0.9991000000000001
2022-09-30 0.9985 -0.0001 -0.01 0.9986 0.9901000000000001 0.9992000000000001
2022-09-30 0.9985 -0.0001 -0.01 0.9986 0.9985 0.9994000000000001
2022-09-30 0.9986 0.0001 0.01 0.9985 0.9981000000000001 0.9988
2022-09-30 0.9985 0.0000 0.00 0.9985 0.9975 0.9987
2022-09-30 0.9986 0.0001 0.01 0.9985 0.9967 0.9987
2022-09-30 0.9985 0.0009 0.09 0.9976 0.9961000000000001 0.9985
2022-09-30 0.9975 0.0004 0.04 0.9971000000000001 0.9951000000000001 0.9982000000000001

Before we discuss some DAI crypto price predictions, let’s have a little look at its history. Although prior results are neither an indicator nor a guarantee of future performance, it can still be useful to gain some context about what the cryptocurrency has done in the past. 

DAI price history

As we have already said, DAI is a stablecoin pegged to the US dollar (see the dai coin price chart above). This means that, ideally, it should always be worth $1 ($0.75).

If we take a look at the DAI price history, we can see that it has been broadly successful. For instance, the difference between its all-time high of $1.09 on 13 March 2020, and its all-time low of $0.96 on 19 February 2020, is just over 14 cents. Compared with other, non-stable cryptocurrencies, that is a very tight price band.

That said, there have been some fluctuations in its price, although nothing like the volatility we normally see when looking at cryptocurrencies.

There was a more noticeable series of price changes early on in DAI’s timespan. The DAI that we know now, multi-collateral DAI, only came out in November 2019. Its predecessor, single-collateral DAI (SAI), could only have one cryptocurrency, ether (ETH), used as collateral against its loans, but the new DAI can have a range of cryptos. When it launched on 22 November 2019, it was worth $0.9974. On that day, it hit an intraday low of $0.9722 and an intraday high of $1.03 before closing at $0.9926.

The first time it seemed to settle at the magic dollar mark was at close of trading on 24 November but, in truth, the first few months of the coin saw the DAI hovering around $1 without ever seeming to stay in one place for too long. In fact, it was almost a year into the crypto’s existence before it stayed at $1 for any length of time, solidifying at that level with only a few minor fluctuations between 14 November 2020 and 18 April 2021, when it opened at $1.01, hit an intraday high of $1.03, an intraday low of $0.9983 and closed at $0.9992.

Indeed, despite the wild fluctuations of the crypto market in 2021, the DAI coin price stayed largely stable in November, trading at $1 on 24 November 2021. Throughout December, DAI suffered from more rapid fluctuations around the $1.00 mark, hitting highs of $1.0098 on 6 December and lows of $0.9956 on 28 December. 

The New Year ushered in more stability, trading at around $0.9999. By 28 January 2022, the coin was valued at $1.00.

But what of the future? What are people saying about the DAI price prediction?

The future of DAI

WalletInvestor’s DAI coin price prediction is that it will be worth $0.997 in a year’s time, and stay around a dollar for the next five years.

On the other hand, DigitalCoinPrice says there will be price growth, with a DAI coin price prediction for 2022 at $1.01 in 2022, 2023, 2044 and staying that price until 2029.

Gov.capital is even more optimistic, suggesting it could be worth $5.68 in five years’ time, breaking the $2 mark in January 2024.

FAQs

It could be. Remember, the main purpose of DAI coin is as a store of value. Ideally, its price should not go up too much.

That said, you need to do your own research. When searching for DAI crypto predictions, remember prices can go down as well as up, and that you should never invest more money than you can afford to lose.

If the analysts behind Gov.capital’s algorithm-based projections are correct, then yes. That said, it is important to remember that, because DAI is a stablecoin, its creators at MakerDAO will do everything they can to peg the price to the US dollar. Remember: forecasts are often wrong.

If you want to buy DAI, you can do so at a range of exchanges, including Dzengi.com. Always remember to do your own research, though, and never invest more money than you can afford to lose.

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Dzengi CJSC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.

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