Chainlink (LINK): what should investors expect in 2024?
Many crypto projects grow rapidly, especially in a bull market, but often fall just as rapidly after the end of the hype around them because they are either underdeveloped or unable to offer anything new. However, fundamental blockchain projects have firmly taken their place and continue developing while demonstrating positive market dynamics. Chainlink belongs to such projects.
What is Chainlink?
Chainlink is a decentralized oracle network launched in 2017. The protocol is a blockchain abstraction layer for creating unique smart contracts that can receive information from external sources (outside the blockchain) using oracles.
Chainlink blockchain was the first protocol to launch a network of decentralized oracles that are used, for example, to provide cryptocurrency quotes for DEX exchanges and other decentralized protocols. Chainlink's solution is used by large and well-known DeFi protocols such as:
Chainlink metrics and statistics
In October 2023, Chainlink slightly lost ground. It was in the 18th place in the CoinMarketCap capitalization ranking. Still, in less than 4 months, it managed to rise to 13th place, overtaking Toncoin, Polygon, Litecoin, Bitcoin Cash, and a number of other projects.
Chainlink's capitalization more than doubled from $4.08 billion to $8.55 billion over the same period and more than 2.5 times in the last year. The LINK cryptocurrency exchange rate has increased 232% over the year from $6.51 to $15.11. In the last quarter alone, the price of LINK has more than doubled.
Although the number of holdings over the last year increased by only 19% from 428,000 to 510,000, the price showed more positive dynamics, rising by 231% from $6.51 to $15.05 over the same time. The most rapid growth of the LINK native token rate began in October 2023, when the bullish trend in the crypto market resumed.
However, according to Token Terminal, the number of daily active users on the network has fallen 9.3% to 8.7 thousand over the past month. Nevertheless, analysts from LookOnChain and SpotOnChain pointed out that whales moved to accumulate assets during the localized drop in the LINK token rate in January 2024. One such whale has shown activity after a year of "hibernation."
Should we expect positive trends from Chainlink in 2024?
It should be noted that the Chainlink protocol has long been among the top 20 blockchain projects in terms of capitalization and is also used by many large platforms in the DeFi sector, the number of which continues to grow. And the number of Chainlink's ecosystem partners also continues to grow.
Renowned decentralized app developer Redacted has partnered with Chainlink to use the CCIP cross-chain protocol to transfer its pxETH token between blockchains.
The Chainlink team also began working with SingularityDAO, a blockchain platform that manages crypto assets using artificial intelligence, to co-develop the Chainlink BUILD business incubator.
Chainlink is the first, largest, and most used decentralized oracle network, which is likely to maintain its place as a leader in this segment in the future. The project team has even partnered with Avalanche, the largest zero-level blockchain, allowing developers to connect to any Web2 API securely.
In December 2023, the project team published a Q4 report titled Chainlink Product Update: Q4 2023, in which they shared the direction of the ecosystem's developments.
The first was the launch of the Crosst-Chain Interoperability Protocol (CCIP), a cross-chain interoperability protocol designed to provide high security for transactions and data exchanges between blockchains.
The second product is Data Streams, a low-latency data processing solution. Data Streams are planned for crypto derivatives, requiring data to be provided quickly.
Finally, the third product was Functions, which aimed to increase the versatility of smart contracts. Functions will allow developers to utilize data through any API from Web2 sources.
In Chainlink Product Update: Q4 2023, the team said it aims to accelerate development and new markets. A particular focus, the developers said, will be on the Crosst-Chain Interoperability Protocol (CCIP), which will allow Chainlink to tap into the new TradFi niche amid growing interest in the RWA market.
Experts believe that RWA will become one of the main trends of the crypto market in 2024, and the growth of this sector will contribute, among other things, to the expansion of the Chainlink ecosystem. According to 21. co's forecasts, the RWA market size could already reach $3.5 to $10 trillion by 2030.
The Chainlink team also plans to continue working closely with issuers, including those in the TradFi market, custodians, and accounting firms, to create new products to prove reserves. In addition, there are plans to expand the global developer community in Asia and Latin America.
Another positive development for Chainlink was the inclusion of the LINK altcoin in the list of the most popular payment platforms, BitPay, which provides cryptocurrency payment solutions worldwide.
As we can see, Chainlink continues to develop and explore new directions, which is perfectly reflected in the dynamics of the project.