This significant investment highlights the increasing adoption and trust in Chainlink’s technology across various financial sectors.
Increased Supply Stalls LINK Price Despite Institutional Backing
According to on-chain analytics platform Lookonchain, 54 new wallets withdrew 2.08 million LINK tokens, valued at $30.28 million, from Binance over the past week. This indicates substantial interest from institutional investors, likely driven by Chainlink’s increasing utility in financial services and blockchain interoperability.
One key driver fueling this interest is Chainlink’s Cross-Chain Interoperability Protocol (CCIP). This protocol offers a straightforward interface for decentralized applications (dApps) and Web3 entrepreneurs, securely addressing their cross-chain needs.
By enabling the transfer of data, tokens, or a combination of both, CCIP supports smart contracts and externally owned accounts. This facilitates seamless interactions across various blockchains.
Chainlink’s CCIP now supports nine major blockchains. These nine blockchains are Arbitrum, Avalanche, Base, BNB Chain, Ethereum, Kroma, Optimism, Polygon, and WEMIX.
This expansion has been pivotal in attracting institutional attention, as it enhances the utility and reach of Chainlink’s services. For instance, the Depository Trust and Clearing Corporation (DTCC) completed the Smart NAV pilot earlier in May.
This pilot involved ten market participants using Chainlink’s CCIP to integrate on-chain data into various blockchain applications. By leveraging Chainlink’s decentralized oracle network, the pilot ensured the secure and efficient transmission of net asset value (NAV) data, a crucial metric for mutual funds.
Additionally, Chainlink’s partnerships with several banking institutions have further cemented its reputation. Institutions like Citi, BNP Paribas, Lloyds Bank, and Deutsche Bank have also shown interest in Chainlink’s offerings.
Analysts Predict Bull Market for Chainlink Despite Current Challenges
Despite these advancements, Chainlink’s price has yet to reflect the same upward trajectory. Currently, LINK trades at $14.41, a 72.6% decrease from its all-time high of $52.70 in May 2021.
Analysts attribute this to the increased circulating supply of LINK tokens. In May 2021, the circulating supply was 425 million tokens, which has since risen to 608 million as of June 29, 2024.
This significant rise in supply, without a proportional increase in demand, has led to an oversupply in the market. Eventually, it contributes to the token’s price stagnation.
However, market analysts maintain a positive long-term outlook for LINK. Crypto analyst Michaël van de Poppe noted a recurring pattern in LINK’s price movements, predicting an imminent bull market phase.
“LINK has been seeing the same pattern over and over again. First six months downwards. Second six months bull market. We’re in the second six-month part and are slowly grinding upwards. Good times ahead,” van de Poppe stated.
Source: Be (in) Crypto
