Bitcoin

What is behind Chainlink’s meteoric rise?

Chainlink (Link) has seen a meteoric rise this year and has become one of the top five largest crypto assets by market capitalization. We take a look at data from the decentralized finance sector as well as from Google to explain this phenomenon.

In the past 24 hours, Chainlink has seen another massive 30% increase (along with other DeFi tokens such as SNX and MKR), This appears to be linked to farmers’ demand for yields try to get YAM tokens so exaggerated with the new protocol.

The fight for the fifth edition 2020

What is behind Chainlink’s meteoric rise?
What is behind Chainlink’s meteoric rise?

The fight for number five, 2020 edition. Source: CoinMarketCap.

The battle for number five in 2020 was fought between Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC), Cardano (ADA) and Link. The latter went far behind the other competitors in the year. However, Link continued to climb throughout the year, eventually finishing fifth at the time of going to press.

Chainlink has been making partnership and integration announcements non-stop throughout the year, though adversity is no stranger to its path. There was a dubious report from Zeus Capital referring to Chainlink as a Wirecard fraud and crypto version. Zeus also claimed that he would take a short position on Link with a profit target of 99%.

The success of the oracle project has also resulted in additional competition. Today it was announced that a major cryptocurrency exchange OKEx is getting into the oracle game. Despite the competition and criticism, the price of the token continues to rise. Why?

Total Ethereum (ETH) value locked in DeFi

The total value of Ethereum secured in DeFi. Source: DEFI impulse.

The decentralized finance space was all the rage in the cryptocurrency world this year, some compare it to the ICO bubble. The total value of Ether (ETH) insured with DeFi has skyrocketed from just over $ 1 billion in mid-June to over $ 4.5 billion in early August.

Most, if not all, DeFi apps require pricing information. Robust performance, preferably decentralized, is critical to the prosperity and security of most DeFi applications. The lack of such data has led to a number of well-documented debacles. Since Chainlink is the best-known player in this area, it benefits most from the growth of the DeFi area.

Google search and LINK price

Google search and link price. Source: IntoTheBlock

Popular interest in Chainlink is at an all-time high in the US and worldwideaccording to data from Google Trends. General market sentiment plays an important role in the dynamics of cryptocurrency prices. Interest in Bitcoin (BTC) peaked in late 2017 when its price hit an all-time high of $ 20,000.according to the same source.

So, Two different data sources seem to explain Link’s rise, at least in part. When Framework Ventures co-founder and Chainlink’s first investor Michael Anderson told Cointelegraph in April that he expected Link to break above $ 25 in the near future, his forecast seemed far from reality. Link was priced at around $ 4 at the time. Today it is closer to the forecast value of $ 25 than the price at the time of the forecast.

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