The price of cryptocurrency Chainlink (LINK 2.29%) was up about 13% over the last 24 hours as of noon ET today, according to CoinMarketCap.com. And it seems some deep-pocketed investors should be credited with sparking the upward move.
A crypto whale is a cryptocurrency investor with a lot of money. And a group called Whale Stats tracks the top 1,000 crypto wallets on the Ethereum blockchain to see what these whales are up to. Over the past 24 hours, these wallet addresses have traded Chainlink more than any other cryptocurrency.
Stocks and cryptocurrencies go up in value when there's strong demand from buyers. Stocks represent ownership stakes in businesses. So as the underlying business performs well, its earnings grow and create sustainable, long-term demand from investors. The same principle applies to cryptocurrencies like Chainlink: Cryptocurrencies with growing use cases tend to create more real-life value and thus stimulate demand from investors.
With Chainlink, various blockchains that enable smart contracts can talk to one another -- think of Chainlink as a bridge between worlds or an interpreter between languages. But it can also do things "off chain." And operating both on and off the blockchain could be a valuable catalyst to long-term adoption. That's why it's one of the more interesting cryptocurrencies out there.
Just because certain investors with deep pockets are buying Chainlink today doesn't mean this is a project destined for success. Therefore, other investors should continue watching how many smart contracts Chainlink is facilitating. According to Whale Stats, roughly 6% of smart contracts over the past 24 hours have been on Chainlink, up 33% from yesterday. This is promising, but it will need to happen consistently over a longer period to establish a trend.