Is Chainlink a Good Investment in 2022? What the Data Is Telling Us

Is Chainlink a Good Investment in 2022? What the Data Is Telling Us

If data is the new oil, then Chainlink is the Standard Oil of the cryptocurrency market.

Is Chainlink a Good Investment in 2022? What the Data Is Telling Us
Darry Port

Updated Nov 17, 2022

Many companies on MoneyMade advertise with us. Opinions are our own, but compensation and in-depth research determine where and how companies may appear.

Crypto

Crypto

Global Markets

Global Markets

Technology

Technology

Since the 2017 crypto boom, Chainlink (LINK) has been a solid performer among cryptocurrencies like Ether and XRP. The LINK price was about $0.11 upon release and gradually rose to an all-time high (ATH) of $52.88 per token during the last bull market. The LINK price moved today and this year.

Our Chainlink price prediction is that LINK will keep trending upward overall.

So is Chainlink a good investment, or is it just another overhyped token? Here’s the low down on investing in LINK and our Chainlink price prediction.

What is Chainlink?

In simple terms, Chainlink is a blockchain project designed to integrate real-world data into smart contracts. This is also known as a decentralized data oracle network, and here's why blockchains need them.

How Chainlink works

Blockchain transactions are irreversible, so it’s crucial to verify all data before executing transactions. Unfortunately, smart contract platforms like Ethereum and Cardano cannot integrate real-world data into these smart contracts on their own. As a result of this, they need a reliable data source called an oracle network to verify and provide data to support smart contracts. 

Chainlink is without a doubt the most popular decentralized oracles in the crypto market—others include Band Protocol and MakerDAO—and is among the best DeFi coins to own. Unlike centralized oracles, Chainlink has a community of decentralized users to verify its data. This eliminates the need for smart contract platforms to verify data with multiple parties, saving them a lot of time and unnecessary work.

What’s so special about Chainlink?

Chainlink was launched towards the end of 2017 and was valued at $0.11 during its ICO. Since then, LINK price has had mostly positive performance, especially during the summer of 2020 crypto craze. The LINK price hit an all-time high of $52.88 on May 10, 2021, and is currently worth .

You read that right, we're in a bear market. But fear not, let’s explore why the LINK price dip might be a worthy buying opportunity if you invest in crypto.

Chainlink price history

Chainlink has a circulating supply of over 491 million LINK tokens, which brings its current market cap to . However, those circulating coins only represent about 47% of Chainlink’s total supply of one billion LINK tokens. In other words, Chainlink’s fully diluted market cap (total supply times current price) equals about $17.8 billion.

The token also has a 24-hour trading volume of over $1 billion, which is impressive considering how long it has been around. Given all these metrics, Chainlink is ranked 23 of the most valuable cryptocurrencies, with around a 0.38% market dominance.

 

For the newly initiated, market dominance measures what percentage of the total cryptocurrency market any given coin has captured. For example, Bitcoin has a market dominance of just under 40%.

So, are LINK tokens a good buy? Let’s see what the market thinks.

Chainlink’s competitive advantage

Most of the top coins competing for market dominance are smart contract platforms, namely Ethereum. And if you scroll down the list, you’ll also see quite a few stablecoins, meme coins, and payment coins:

Smart contract coins

SOL & ADA

Stablecoins

USDT & USDC

Memecoins

DOGE & SHIB

Payment coins

XRP & LTC

Clearly, there’s stiff competition in these categories. Keeping in mind that Chainlink is ranked 23, where does its closest competitor rank? The answer is 62.

To rephrase: there's a near 40-step gap between Chainlink and the next biggest oracle network, MakerDAO.

Besides rank, another notable fact is that Chainlink secures billions of dollars worth of smart contracts for decentralized apps (DApps), giving it a strong and stable footing in the market.

To cap it all off: Chainlink isn’t the only decentralized oracle in the industry, with a few notable competitors like Band Protocol and UMA. Chainlink, however, is the most ambitious, developed, and deployed oracle in the crypto market.

Chainlink price prediction

Chainlink is not the first token to show market leadership—other cryptocurrencies have been in the same spot and still failed. So, what does the future hold for Chainlink? Here's our Chainlink price prediction.

Chainlink already has a stable presence, considering the growing popularity of its services, its reliability, and its huge lead over the competition. The token has grown its market capitalization to nearly $3.5 billion in just over three years and has secured billions of dollars in DApps. Despite the success, Chainlink hasn’t grown complacent.

Chainlink 2.0

Smart contracts are becoming increasingly popular, and Chainlink is making them easier, cheaper, and more secure to use. The token’s developers recently announced plans to upgrade the current version to a more advanced one: Chainlink 2.0.

Chainlink 2.0 will offer several advanced features, most notably off-chain networks built on top of the oracles. Off-chain networks are designed to direct most of the complicated computational tasks away from the smart contract’s platform’s main layer. The Chainlink network will keep generating value as smart contracts and blockchains rely more on its price oracle function. This means the Chainlink price prediction will go up as its oracle network is more widely utilized and depended on as a source of price data.

Chainlink price prediction: will it 100x?

Chainlink is one of the best-performing cryptocurrencies to date, with its current price still thousands of times higher than that of its ICO. So, how does that impact the Chainlink price prediction?

Unfortunately, it’s anyone’s best guess. And that's not coming from some half-hearted cop-out. Chainlink is the top oracle in cryptocurrency, but we don’t have similar successes to compare it to. That said, no coin with a circulating supply similar to Chainlink has ever reached a $1,000 price tag.

However, that’s not to say that Chainlink doesn’t still have a ton of upside potential.  For one, decentralized oracle networks are only going to get bigger. And secondly, Chainlink has been trading at a massive discount in 2022.

If you’re looking to get in at the minimum LINK price, now's the perfect time. Just remember that crypto is extraordinarily volatile, and the LINK price is no different. Ultimately, our Chainlink price prediction is that LINK will keep trending upward overall. But, our Chainlink price forecast also posits that it's unlikely to revisit its 2021 ATH anytime soon.

Crypto winter blues

Crypto winter blues

Are you HODLing?

How to buy Chainlink

If you’re sold on Chainlink, you can go ahead and buy LINK in just a few minutes. However, make sure you buy LINK from a reliable crypto exchange and then store them in a safe crypto wallet. Let's walk through the process.

Chainlink crypto exchanges

Chainlink is currently one of the most popular tokens on the market, so you can find it on most crypto exchanges. But two of the most trusted platforms are Uphold and Crypto.com.

uphold
Uphold

Crypto

Uphold is based in the U.S. and undergoes thorough scrutiny and regulation. More importantly, the platform offers Chainlink, but you may see slight differences in overall price due to their transaction fees. Another one worth noting is Crypto.com which has a suite of reward-bearing debit cards that let you spend your crypto.

Other reliable crypto exchanges for buying Chainlink include:

Coinbase

Webull

Kraken

Robinhood

Nexo

Gemini

Where to store Chainlink

After you’re done buying LINK, you’re going to need a place to keep your coins safe from hackers. You’ve got two options here. 

1. You keep your coins on an exchange. This option is easier but not highly recommended because exchanges can get (and have been) hacked or become insolvent.

2. Use a software wallet or hardware wallet. When comparing a crypto wallet vs an exchange to store your coins, crypto wallets are generally preferred. However, a crypto wallet is a bit more cumbersome and comes with different risks. For example, losing your crypto wallet private keys means losing access to your coins. But,  these crypto wallets are still recommended because they give you full custody of your crypto assets and let you track your coins on the blockchain.

Is Chainlink a good investment?

The TL;DR is that the Chainlink network is the leading data oracle providing an essential service to rapidly growing smart contract platforms. Within the broader crypto market, the Chainlink project is one of the least risky bets. Not to mention, the LINK price has the bear market discount. Happy shopping.

Find your next investment