Chainlink (LINK) Grows 26% in 6 Days – Is There Room for More?
Chainlink's LINK (LINK) token experienced an impressive 26% increase between November 2nd and 8th, approaching $14, a level not seen since April 2022. This cemented its position as the 10th largest cryptocurrency by market capitalization (excluding stablecoins).
While the price action is welcome to traders, is Chainlink's current valuation of $8.1 billion justified? According to Scientelegraph research, the dramatic price increase is driven by real-world asset (RWA) tokens and early signs of institutional adoption. But let's dig deeper to assess the continuity of the current lineup.
Spot Bitcoin ETF leverages expectations and real-world asset token sentiment
Bloomberg exchange-traded fund (ETF) strategists James Seifert and Eric Balhunas issued a research note on November 8 that boosted cryptocurrency traders' confidence.
New research note from me today. We still believe a 90% chance of spot #Bitcoin ETF approvals by January 10th. But if it comes early, we're entering a window where there *could* be a wave of approval for all current applicants pic.twitter.com/u6dBva1ytD
— James Seyff (@JSeyff) November 8, 2023
In their note, they explain that the window for approval of Bitcoin (BTC) exchange-traded funds will open on November 9 when the United States Securities and Exchange Commission completes the final transfer period.
Seifert maintains a 90% chance of approval but warns that the regulator's final decision could be delayed until mid-January.
Altcoins have seen significant price increases over the past seven days, with Trust Wallet Token (TWT) up 41%, Immutable X's IMX (IMX) up 29% and NEO up 28%. LINK's appreciation is indicative of positive sentiment for altcoins, especially following Bitcoin's slowdown around the $35,500 mark.
Within the ChainLink ecosystem, several positive developments have contributed to LINK's recent performance.
On November 7, Vodafone, a major European and North African telecom company, officially launched its partnership with Japanese financial conglomerate Sumitomo Corporation, using Chainlink oracles to streamline transactions and provide a variety of applications, including electric vehicle charging stations and toll lanes.
This digital platform, known as Pair Point, enables vehicles and devices to autonomously interact and transact in the emerging Internet of Things (IoT) landscape. Pairpoint uses Vodafone's Digital Assets platform and has full integration with partners such as MasterCard, HSBC, Deloitte and IBM.
Beyond IoT, a broader trend seems to favor Chainlink's oracle solution. The RWA token is set to become the main standard as evidenced by HSBC's November 8 launch of custody services for regulated securities.
HSBC's Zhou Kung Li has seen increasing demand from asset managers and owners for digital asset protection and fund management. According to HSBC's press release, the custody service will complement HSBC's recent gold offering to extract Orion digital assets. It is also worth mentioning that HSBC manages approximately $3 trillion in assets globally.
The demand for LINK token by professional traders has increased.
Despite the bullish outlook, traders are questioning whether there are high institutional flows into Chainlink to support the 26% rally in six days. Unfortunately, there's no foolproof metric to measure this, but Greyscale's Chainlink Trust ( GLNK ) shows optimism despite its relatively modest $3.9 million in assets under management.
This over-the-counter instrument is traded through regular stock market brokers, making it accessible to asset managers who cannot invest directly in cryptocurrencies. In particular, GLNK's price is trading at a 320% premium compared to the fund's equivalent underlying LINK holdings, indicating strong buying interest.
Further fueling Chainlink's impressive profits is LINK's listing on the HashKey exchange, a licensed trading platform for professional investors in Hong Kong. Although the year Although launched in August 2023, the exchange is affiliated with the same group behind Hashkey Capital, a popular digital asset venture investment firm founded in 2015.
Related: HSBC taps Ripple's Metaco to launch security token holding
From a ChainMetrics perspective, Chainlink's price increase is fueled by network activity.
Specifically, the most recent high occurred on November 7, 2022, coinciding with issues on the now-defunct FTX exchange. Excluding this particular instance, the current two-day average of 7,700 daily chainlink transactions is the highest since June 2021.
While there have been some valid criticisms of Chainlink's excessive centralization, its verbal supremacy remains unchallenged. Therefore, any tailwind for the RW market should have a positive effect on the LINK price, paving the way for further price increases from $14.
This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.
