Among the top-tier cryptocurrencies I've long thought provide meaningful value is the Oracle Network Chainlink (LINK +2.63%). Acting as a middleman between layer-1 networks and non-crypto entities seeking to access blockchain infrastructure, Chainlink's unique oracle technology enables portability between off-chain and on-chain networks.
CRYPTO: LINK
Key Data Points
What that means is that most real-time data feeds supplying essential data points, such as pricing, to decentralized exchanges, for example, require Chainlink's network to seamlessly integrate with a range of blockchain networks that require these price feeds.
With plenty of underlying development currently relying on Chainlink to continue to operate in a stable and efficient manner, this is a top-tier innovative blockchain that has carved out quite an important (and profitable) niche, particularly given the growth we've seen in decentralized finance (DeFi) in recent years.
With this backdrop in place, the token's 7.1% weekly move (as of 6:30 p.m. ET) shouldn't catch investors completely off guard. That said, here are two key catalysts investors have clearly priced into Chainlink's price over the past week, and what long-term investors may want to make of these notable updates.
What drove Chainlink higher this week?
Source: Getty Images.
There are two key catalysts I've identified as integral to this week's 7% surge in Chainlink.
The first key catalyst I've been focusing on is the long-awaited conversion of Grayscale's Chainlink trust into an exchange-traded product, which began trading publicly on the NYSE Arca exchange on Dec. 2.
This new ETP format will enable traditional investors to purchase an asset that tracks the price of Chainlink's native LINK token directly. And given the surge of investor capital into this fund ($64 million roughly 24 hours after launch), and a 0% expense ratio out of the gate (until March, or until this fund hits $1 billion in assets, whichever is sooner), there's another viable demand catalyst for LINK tokens to watch.
Now, there has been some pushback from investors around the structure of this ETP, in that investors who own this exchange-traded product won't benefit from any staking-related revenues (or other revenues at all), meaning it's a pure bet on the price of Chainlink's native token over time. For many in the crypto sector who prefer to own assets on-chain (due to the ability to capture staking yields), that's always an option. However, a broader investor base overall is generally beneficial for any project.
The other key catalyst I'm watching is a new bridge introduced by Chainlink to span the Solana and Coinbase networks. Secured by Chainlink's cross-chain interoperability protocol, transfers between Coinbase's Base network and the Solana blockchain have been made possible. This bridge could drive significant value accretion over time, and investors appear to be clearly impressed with what they see.
