DOT rallies 12% in a day as Polkadot gears up to solve a major blockchain hacking problem

cointelegraph.com:

Polkadot (DOT) price ticked higher in the past 24 hours on anticipations that its new cross-chain communications protocol would solve a long-standing problem in the blockchain sector.

Bulls pushed DOT's price to $16.44 on May 5 from $14.72 a day before, gaining a little over 12% as they assessed the launch of XCM, a messaging system that allows parachains — individual blockchains that operate in parallel inside the Polkadot ecosystem — to communicate with each other.

As Cointelegraph reported, future updates in the XCM protocol would see parachains exchanging messages without relying on Polkadot's central blockchain, the Relay Chain. That expects to eliminate bridge hacks that have cost the industry more than $1 billion in a year.

DOT's gains also appeared in line with similar upside moves elsewhere in the cryptocurrency market.

For instance, Bitcoin (BTC) rallied nearly 6% in the same period DOT climbed 12% with their correlation coefficient at 0.87 as of May 5, suggesting that BTC and DOT's prices are moving almost in lockstep in recent days.

The crypto market gained after Federal Reserve clarified that it would not increase benchmark rates by a 75 basis point, as propagated by one of its presidents, James Bullard, in April 2022. The S&P 500 index, too, rallied by nearly 3%, and bond yields fell.

Nonetheless, the U.S. central bank remained on its path to cutting interest rates, hoping to get near the 2-3% “neutral” while preparing for a "softish" landing, i.e., curbing inflation without overly impacting the U.S. economic growth.

On May 4, it began with a 50 bps cut, with chairman Jerome Powell promising more 0.5% increments.

As a result of this hawkish tone, Bitcoin's current price rebound could fizzle out once more short of