The cryptocurrency market is going through a dark time, and investors must be more vigilant than ever about where they put their money. But all the negativity doesn't mean there aren't opportunities. Yes, many cryptocurrencies may never recapture the value they once had, but that's OK.

Chainlink (LINK 0.77%) stands out as a potential crypto that could rebound and grow to new highs over time. The LINK token has taken a beating during the broader crypto bear market, but here is why it could be an absolute winner when brighter days arrive.

What is Chainlink?

Chainlink is a decentralized blockchain built on Ethereum. Chainlink is an oracle network; it connects blockchains to external systems outside of crypto. In other words, it can pull in data and link it to the blockchain, making smart contracts possible, which the blockchain makes tamper-proof.

For example, imagine someone buying a home on a smart contract. Hypothetically, a smart contract could keep a financial record of the transaction and update it to reflect property ownership when the proper conditions are met, such as payment. From healthcare records to real estate, complex databases of information worldwide run the risk of fraud or mistakes. Smart contracts could make these types of records more secure, and oracle networks like Chainlink make that happen.

There are countless transactions among the many industries where smart contracts would make sense, which gives Chainlink a more visible path to real-world adoption than many cryptos. This would play a huge role in the value of the LINK token.

How LINK's value could increase

LINK is the token used to pay for services on the Chainlink network. However, unlike some cryptos, the supply of LINK is capped at a maximum of 1 billion tokens. That fixed supply could support the token's price if Chainlink gets adopted in enough applications to increase the token's demand.

Chainlink took a significant step forward in early December by launching staking, which encourages the use of Chainlink by rewarding those who commit LINK tokens to smart contracts to guarantee the performance of the oracles on the network. In other words, it's paying out tokens for people to support Chainlink, improving its performance, which ideally will increase Chainlink's usage.

The hope is that LINK's value will increase as usage of Chainlink grows. It's a cold start problem, which means that getting the momentum started in the first place is the hardest part, and that's where Chainlink is today. But that momentum can be powerful once it gets moving.

The opportunity today

Today, Chainlink is the 20th-largest crypto by market cap at a valuation of $3.5 billion. That's not tiny, but outside of Bitcoin and Ethereum, it's not clear that another crypto has a broader range of uses. Adoption is arguably one of the critical drivers of a crypto's value over the long run.

Other oracle networks could become popular, so owning Chainlink will require constant due diligence. The crypto industry is still very young, and the recent events of FTX and other collapsing exchanges have only increased the uncertainty of crypto's long-term potential. But a bold investor that appropriately manages the risk of owning an asset such as Chainlink could benefit significantly if adoption picks up. Chainlink is down 87% from its high in May 2021, leaving room for a strong recovery once the crypto market rebounds and Chainlink powers more real-world applications.