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Is Chainlink a good investment? 5 reasons why we think that

 


Chainlink is a large blockchain project widely adopted by most decentralized finance (DeFi) and non-fungible token (NFT) developers. It is a different platform from other blockchain networks like Cardano and Ripple. In this article, we explain the five reasons why we believe Chainlink is a good investment for both short-term and long-term investments.


What is Chainlink?

Before we share the five reasons why Chainlink is a good investment, let's explain what the network is and how it works. Chainlink is an intelligent oracle network that helps provide off-chain data for on-chain ecosystems like those in DeFi and NFTs.


For example, a developer building a decentralized stock trading platform needs a market feed for publicly traded stocks. Therefore, rather than dealing directly with exchanges, he works with Chainlink, which has all this data and tools to integrate it into their ecosystems.


The same applies to other industries. A good example of these industries is sports betting, which will also be disrupted by blockchain projects. For a decentralized betting platform to work well, it must have access to credible data on games. Chainlink can provide these numbers.


In recent months, Chainlink has added more solutions to the ecosystem. For example, it recently launched Keepers, a smart contract automation platform. It has also introduced proof of reserve, cross-chain communication tools and VRF platforms.


LINK is the governance token for the Chainlink ecosystem. It is a leading cryptocurrency with a market cap of more than $5.4 billion. This makes it the 26th largest cryptocurrency in the world.


Chainlink has an outstanding market share

One reason Chainlink is a good investment is that it has a commanding market share in the oracle industry. While the number of oracles in the industry is increasing, Chainlink is the most popular. It is used by some of the leading players in DeFi like Aave, Uniswap, Anchor Protocol and Curve Finance.


According to DeFi Llama, Chainlink has a total secured value (TVS) of more than $53 billion, giving it a market dominance of 54%. The second largest player in the industry is Internal with a TVS of over $17B and Maker with only 2 projects with a TVS of over $13B.


Therefore, the fact that it has a good market share and brand reputation is a positive catalyst for Chainlink.


Big market size

Chainlink is a leading player in an industry with huge potential. For example, the decentralized finance industry has a total value (TVL) of more than $200 billion. This is significant growth considering the sector didn't even exist a few years ago.


Although the industry is highly volatile, analysts believe it represents the future of finance. A future where people will use the concept of smart contracts in all aspects of their financial well-being, such as savings and investments.


Analysts expect the DeFi industry to be more than 100 times larger than it is today. Therefore, if this prediction comes true, there is a likelihood that Chainlink will play a role in it.


The same applies to other industries that are to be tokenized. For example, the decentralized betting industry is expected to do so well because of the regulations in place in the industry. In this case, Chainlink will play a role.


There are other industries that will benefit from decentralization. For example, Chainlink has a partnership with the Weather Channel, which means people can use this data to develop their applications.


Chainlink is undervalued

One of the most important things about investing is to always buy an asset that is relatively undervalued. In my view, Chainlink is one of the most undervalued cryptocurrencies in the world.


At the time of writing, the coin is trading at its lowest level since January 2021. It's also down more than 78% from its peak in 2021. Its market cap has also fallen to just $5 billion.


Therefore, I believe Chainlink is a grossly undervalued cryptocurrency. For one, even though its market value is around $5 billion, it has helped secure more than $54 billion in assets. This is a sign that there is more room to grow.


The reason for the underrating is that many people don't know many details about the platform and its features.


Correlation with other assets

Another reason why you should invest in Chainlink is that it has a strong correlation with other assets like stocks and cryptocurrencies. A closer look at the blockchain industry reveals that most cryptocurrencies have fallen sharply over the past few months.


For example, Bitcoin has moved from around $68,000 in November 2021 to the current $38,000. Similarly, Ethereum has surged from around $5,000 to $2,800. Overall, the market cap of all digital coins has dropped from more than $3 trillion to around $1 billion.


Other assets like stocks are also down. Chainlink's current weakness is not an isolated case. This means that if the others do the same, the coin will rise again.


Eric Schmidt is a strategic advisor

Finally, Chainlink is a good investment as Eric Schmidt, the former CEO and chairman of Google, is a strategic advisor. This is remarkable because he brings a wealth of experience to the network and has many connections in the right places. As you recall, Schmidt was the person who helped make Google one of the most important companies in the world. In a note , the founder of Chainlink said :


“Eric's experience and insight into building global software platforms for next-generation innovation will be invaluable as we help developers and institutions usher in a new era of economic fairness and transparency. "

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