Chainlink’s LINK token has been having a great few weeks, rallying more than 40% since late January.
The aforementioned cryptocurrency, which serves as the native digital asset of the Chainlink network, reached $19.67 yesterday, according to CoinMarketCap data.
At this point, the digital currency was trading at its loftiest value since early 2022, and was up roughly 45% after falling to almost $13.50 on January 25, additional CoinMarketCap figures reveal.
When explaining these impressive gains, most analysts who provided input for this article focused on the substantial progress made by the decentralized oracle network.
“From a higher-level perspective, Chainlink has grown from a decentralized data feed to include other major use cases over the past few years,” said David Lawant, Head of Research at FalconX.
“Notably, some of these use cases include tokenization and cross-chain interoperability, which are two of the hottest topics in crypto at the moment,” he emphasized.
“Despite the strong positioning, LINK was underperforming many other assets with solid narratives, such as MKR, OP, and LDO, between the beginning and 2023 and just recently,” Lawant added.
Joshua de Vos, Research Lead at CCData, also weighed in, offering his perspective on what fueled the digital currency’s recent upside.
“Our data and analysis indicate significant LINK inflows, particularly in Binance,” he stated. “Interestingly, most of the inflows come from a ‘Chainlink: Non-Circulating Supply’ wallet.”
The market observer specifically claimed that the digital token’s recent gains were primarily the result of “broader, fundamental factors, such as technological advancements, institutional trials, and successful integrations.”
After providing this generalized explanation, de Vos shed further light on the matter.
“A significant factor in LINK’s price appreciation is its relevance to the real-world asset (RWA) and tokenisation narratives that are currently in the spotlight,” he said.
“The recent uptick in LINK’s price may be attributed to the success of its Cross-Chain Interoperability Protocol (CCIP) technology, initially tested by SWIFT in a proof of concept in 2022,” the analyst added.
“The momentum extended into June 2023, with SWIFT and major institutions such as Citi, BNY Mellon, and DTCC announcing trials for CCIP and Public Key Infrastructure (PKI) technologies,” de Vos noted.
“Other Oracle tokens have also been gaining momentum recently, such as PYTH, API3 and BAND, likely benefitting from the market leader within the Oracle category outperforming the general market,” he concluded.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and SOL.
