There’s an argument that the best way to profit during a gold rush is not to sprint into the mine but rather to sell shovels to miners by the trainload. As cryptocurrency gets institutionalized, some of the “shovels” are data sources, which are exactly what Chainlink (CRYPTO: LINK) offers.
And that’s what makes it one of the best cryptocurrencies to buy right now, so let’s take a closer look at why it’s positioned to succeed.
This coin has a great business model
At the moment, financial institutions are wiring their traditional assets into blockchains for management. To do that, they need financial, economic, and market data, as well as a safe mechanism for passing messages across chains.
As an oracle coin, Chainlink’s oracle network and cross-chain interoperability protocol (CCIP) are built for that job, and coinholders capture value from usage, as users must pay the network for its data oracle services on the chain where they’re doing business. Most of the time that payment is denominated in the Link token, which forces users to buy it beforehand, though in some cases it’s also possible to pay with a chain’s native gas fee token; the fees accrue to the Chainlink network either way. So every time there’s an on-chain application that taps Chainlink’s system for data, or relies on its system for cross-chain messaging, it creates some value for Link holders.
The chain is also a critical tool for decentralized finance (DeFi) and pretty much every other on-chain financial application, too. Smart contracts cannot examine the real world directly, they need data oracles bring it to them and package the information in a way that’s both machine-readable and trustworthy from the perspective of everyone who might need to interact with it. Chainlink already secures $51.8 billion in value across the DeFi segment and adjacent applications, making it the dominant oracle by total value secured (TVS), and demonstrating that it fulfills both of those criteria.
As a result of these capabilities and its reliability, the institutional use cases for this coin are no longer hypothetical. Participants like JPMorgan Chase are already using Chainlink for their cross-chain operational needs. Similarly, asset manager WisdomTree said it is bringing on-chain data for a tokenized real-world asset (RWA) private credit fund using Chainlink, with plans to extend to additional tokenized funds.
