Institutional investors recently purchased more than $30 million worth of Chainlink (LINK) tokens.
This significant investment underscores the growing use and trust in Chainlink’s technology across various financial sectors.
Increased Supply Stalls LINK Price Despite Institutional Investor Support
According to on-chain analytics platform Lookonchain54 new wallets withdrew 2.08 million LINK tokens, worth $30.28 million, from Binance over the past week. This shows strong interest from institutional investors, likely driven by Chainlink’s growing utility in financial services and blockchain interoperability.
A major driver of this interest is Chainlink’s Cross-Chain Interoperability Protocol (CCIP), which provides a simple interface for decentralized applications (dApps) and Web3 startups to securely address their cross-chain needs.
By enabling the transfer of data, tokens, or a combination of both, CCIP supports smart contracts and externally owned accounts. This facilitates seamless interaction across multiple blockchains.
Chainlink’s CCIP currently supports nine major blockchains. These nine blockchains include Arbitrum, Avalanche, Base, BNB Chain, Ethereum, Kroma, Optimism, Polygon, and WEMIX.
This expansion has played a major role in attracting institutional attention, as it increases Chainlink’s utility and range of services. For example, the Depository Trust and Clearing Corporation (DTCC) completed its Smart NAV pilot in early May.
The pilot involved ten markets, using Chainlink’s CCIP to integrate on-chain data into various blockchain applications. By leveraging Chainlink’s decentralized oracle network, the pilot ensured the secure and efficient transmission of net asset value (NAV) data, a key metric for investment funds.
Additionally, Chainlink’s partnerships with several banking institutions have further cemented its reputation. Institutions such as Citi, BNP Paribas, Lloyds Bank, and Deutsche Bank have also expressed interest in Chainlink’s services.
Analysts are bullish for Chainlink uncertainty current challenges
Despite these advances, Chainlink’s price has yet to reflect the same bullish trend. Currently, LINK is trading at $14.41, down 72.6% from its all-time high of $52.70 in May 2021.
Analysts attribute this to the increase in LINK’s circulating supply. In May 2021, the circulating supply was 425 million tokens, which has increased to 608 million as of June 29, 2024.
LINK Circulating Supply | Source: Dune/synthquest
The significant increase in supply without a corresponding increase in demand has led to an oversupply in the market. This ultimately contributed to the stagnation of LINK price.
However, market analysts remain bullish on LINK in the long term. Analyst Michaël van de Poppe has noticed a recurring pattern in LINK’s price moves, predicting an upcoming bull market phase.
LINK Price Performance | Source: X/CryptoMichNL
“LINK has been showing the same pattern over and over again. First six months down. Second six months bull market. We are in the second half of the six months and it is slowly going up. Good times are coming,” van de Poppe stated.
