Chainlink (LINK), the Ethereum token that powers the Chainlink decentralised oracle network, has established itself as the altcoin to look out for after a strong performance in 2020 and 2021. The currency is used to pay the network’s node operators, or oracles, for providing secure data feeds and has experienced significant growth in value as the popularity of Chainlink has increased.
The Chainlink middleware is unique for its ability to solve the oracle problem. The oracle problem is an inherent limitation of blockchain that prevents the real-world application of smart contracts by preventing networks from connecting to off-chain data resources like web APIs and traditional bank account payments. As institutional investors flood the crypto market, it is expected that tokens like LINK with real-world utility and attractive staking ecosystems will outperform the large-cap tokens in the coming years.
It is important to understand the past performance of a token to analyse and predict its future price movements. This section introduces you to the key determinants of LINK’s value and its price history.
Chainlink’s future potential comes from its ability to facilitate blockchain interconnectivity by linking real-world applications with smart contracts-based solutions. Its enhanced decentralised oracles and reinforced network mean that the blockchain allows smart contracts to access key off-chain resources. Its utility token, LINK is both a payment token that is used to pay Chainlink node operators for providing oracle services and a work token that can be staked by node operators as collateral to provide oracle services. Thus, the price of LINK is heavily dependent on the potential of the Chainlink network to revolutionise the decentralised finance (DeFi) and blockchain world.
Over the last two years, altcoins have been taking the spotlight as massive price surges are seen across the board with tokens like LINK setting new all-time highs (ATHs) regularly. Other leading altcoins like Cardano (ADA), Tezos (XTZ) and Compound (COMP) have also shown dramatic improvement in their performance, leading to more positive sentiment in the crypto market generally. With the current boom in the DeFi markets, the altseason is only expected to continue and strengthen the price momentum for LINK in the coming years.
With that being said, one of the notable factors about LINK’s price action is its ability to often function independently from the rest of the crypto market. Altcoins often move together in price depending on Bitcoin’s price and sentiment. However, LINK has acted as an outlier multiple times, showing bullish trends when Bitcoin’s price drops. This behaviour from LINK is crucial as it establishes the possibility that altcoins have a future even beyond Bitcoin.
As the DeFi market continues to experience significant growth, the need for decentralised oracles for smart contract protocols, like those offered by Chainlink, becomes even more important and will thus affect LINK’s price. Further, experts believe that Chainlink’s ability to provide reliant and decentralised oracles will enable DeFi applications like those related to insurance and gambling to be safer and more trustworthy. This presents an exciting opportunity for investors to capitalise on the DeFi boom by purchasing LINK.
Another factor driving LINK’s price is Chainlink’s high profile partnerships. In 2021 alone, over 281 different crypto projects have integrated Chainlink into their networks. Previously, LINK’s price showed significant improvement after Chainlink announced partnerships with China’s national Blockchain Services Network and projects like SmartPy and Cryptonomic. The recent surge in attacks on DeFi and crypto projects means that Chainlink will not run out of companies in search of an oracle, making investing in LINK even more lucrative.
The Chainlink protocol was created in September 2017 and officially launched on mainnet in May 2019. (LINK was priced at around $0.50 during the launch)
4 March 2020:
LINK price rises in the first four days of March, yet again showing independent price movement from the rest of the cryptocurrency market. The price rise was driven by Chainlink announcing its partnership with Chiliz, an Ethereum-based sports tokenization platform, to unlock real-time non-fungible token creation. (LINK is approaching $5)
13 April 2020:
Chainlink surpasses rival XRP in daily volume. (LINK is priced at $3.44)
30 April 2020:
SmartPy and Cryptonomic, two projects in the Tezos ecosystem, integrate Chainlink price oracles with Tezos smart contracts. It leads to predictions that LINK will hit $25 in the future. (LINK is stabilised above the $3 price point)
24 June 2020:
LINK price is pushing above its previous all-time high, making room for price discovery. (LINK hits $4.80)
7 July 2020:
LINK finally surpasses the $5 mark after a strong uptrend and hits a new all-time high. (LINK hits $5.37)
14 July 2020:
Chainlink overtakes Litecoin and Binance Coin to become the eighth-biggest cryptocurrency by market capitalisation. (LINK trades above the $7 price point)
Numerous high-profile partnerships and the strong momentum in the altcoin market push LINK above $8, a new ATH. (LINK reaches $8.66)
21 July 2020:
CoinMarketCap lists Chainlink as the largest DeFi token by market capitalisation. (LINK is valued at $7.26)
9 August 2020:
A massive short squeeze in the futures market leads to LINK surging and reaching a new all-time high. (LINK hits $12.72)
15 August 2020:
LINK is briefly the fifth largest cryptocurrency by market cap in August after rising by over 118% in the first two weeks of August. (LINK is approaching $19 during this period)
25 September 2020:
After a six-week downtrend from its all-time high, LINK rebounded with a 28% price rise, marking the beginning of its recovery. (LINK is priced at $9.83)
14 December 2020:
After seeing a sharp short-term drop against Bitcoin at the end of November, LINK improves its value by 10% in three days, regaining investor trust in the currency. (LINK trades at $12.93)
18 January 2021:
LINK surpasses Bitcoin Cash to regain its position as the eighth-largest cryptocurrency. (LINK is trading above the $20 price point)
20 February 2021:
LINK hits a new all-time high of $34.90 but failed to stabilise its position. Despite the subsequent price fall, LINK had surged by 786% in 9 months. (LINK hits $34)
10 May 2021:
Despite the price drop, strong growth in DeFi and healthy on-chain indicators mean that LINK returns to bullish price movement. A rally in March and April lead to the token hitting its current all-time high and surpassing the $50 mark. (LINK hits $52.70)
July to August 2021:
The currency witnessed a sharp decline in value in June as the crypto market showed bearish trends. After dipping as low as $13.88 in July, LINK has begun a recovery and is currently steadily placed above the $20 psychological level. (LINK is currently fluctuating between $22 and $25)
As the DeFi market continues to grow explosively, Chainlink’s ability to generate multiple subcontracts by taking data from trustworthy nodes and oracles to ensure premium accuracy makes it a unique future investment opportunity. With LINK approaching the $30 price point as of August 2021, here is an analysis of how the token fares against crypto, fiat and commodities.
Compare Chainlink with the US dollar
The market crash in March 2020 showed that manipulation of fiat currencies by excessive money printing can adversely affect traditional investors, pushing more new and seasoned traders alike to try their hand at cryptocurrencies. Tokens like LINK not only carry the inherent value of being the utility token of a blockchain with immense growth potential but are also decentralised and offer low storage and transfer costs when compared with fiat currencies like USD. Unlike many other fiat currencies, the US dollar continues to fare well in the market though investors increasingly seem to be leaning towards innovative and futuristic investment options like LINK as viable alternatives.
Compare Chainlink with Gold and Oil
Commodities like Gold and Oil have long since been regarded as favourable investment options, especially due to their scarcity. Crypto king Bitcoin has often been regarded as Digital Gold as the currency offers similar benefits to Gold and even followed Gold’s price trajectory in the initial months of the pandemic. However, Oil as a commodity suffered because of the pandemic-caused supply chain blocks, with its price staring at the possibility of hitting a negative value at one point. Tokens like LINK are preferred by new-age investors for their ability to function even in extreme circumstances. LINK not only offers convenience and liquidity, but it has the potential to grow many times over in the future owing to its strong fundamentals.
Compare Chainlink with Ethereum
It is important to understand the functional difference between Ethereum and Chainlink before comparing their investment prospects. Ethereum is a decentralized, open-source smart contract platform that supports projects that seek to use blockchain technology to solve real-world problems. Chainlink bridges the gap between real-world applications and external data resources by offering an interoperability solution that facilitates blockchain interconnectivity.
Thus, while the two cryptocurrencies have different use cases, the question remains – which offers better future prospects. Though Ethereum is an established project in the DeFi world, alternatives offering faster and cheaper transactions are emerging. Chainlink on the other hand has only begun building its foundation over the last two years and its scalable, flexible infrastructure creates lucrative future opportunities for the blockchain in the booming DeFi sector.
While it is crucial to analyse historical data, key factors and the cost of investing in an asset, the most important determinant is its future price trends and growth opportunities. This section explains the forecasted price of LINK in the coming few years by experts and analysts to act as a starting point for your own research into predicting LINK’s value.
Volatility is inherent to the crypto market and LINK has so far performed spectacularly in 2021, even reaching its all-time high of over $52. As the token currently trades above $20 in August, Chainlink’s healthy fundamentals are encouraging signs for investors. Analysts believe that if the upward momentum continues, LINK will surpass the $30 price point and stabilise at around $40 by the end of the year. Experts are more positive and argue that LINK will once again break the $50 barrier this year, reaching as high as $60 by December.
With two very fruitful years in the crypto market, LINK’s performance in 2022 is expected to focus on stabilising the gains made by the token. While the altcoin season is expected to further push LINK’s price up, some experts believe that the token will settle for reaching as high as $47.36 in 2022. It is important to understand that Chainlink was valued at under $1 for much of its first 18 months and its growth to a price of more than $30 has already provided a huge return on investment. Others have more ambitious plans for LINK in 2022 with analysts predicting its price will reach as high as $75.
Chainlink’s dramatic performance in 2020 and 2021 is slowly establishing the currency as a key altcoin, setting the basis for another major bull run post-2022. The growth of the DeFi market coupled with the number of Chainlink integrations that have been signed this year will significantly affect LINK’s price in the future. Predictions by some analysts state that LINK will hit $60 during 2023, reaching as high as $84 in 2025. The analysts further believe that it will take LINK at least till 2028 to reach its target price of $100. Forecast from elsewhere suggests that LINK will hit the $100 price point by 2023 and even approach $150 by 2025.
For more detailed predictions, read our Chainlink price prediction guide here.
LINK’s upward price trend in the crypto market over the last two years is the result of a robust infrastructure with practical applications, numerous effective partnerships and the DeFi season. As an altcoin with a target of reaching the $100 price point, Chainlink has set the ground to push against its resistance and create strong upward momentum. Its unique use case has consolidated investors' trust in the blockchain, making investing in LINK more exciting than ever. However, significant research into the risks associated with investing in cryptocurrencies is necessary before taking the plunge.