In this guide, we will voice our own and market’s opinion on LINK future while discussing Chainlink price forecast for 2021 and beyond.
Please bear in mind that you should take this and any other prediction with a grain of salt since predicting anything is a thankless task, let alone predicting the future of a novel, highly volatile financial asset like LINK.
Now, let’s head into it.
Before we delve deep into the Chainlink price prediction and answer questions if Chainlink is a good investment or not, why will LINK succeed or fail or why will LINK price rise or drop, let’s quickly throw a glance at what is Chainlink and its to date history.
ChainLink platform acts as a decentralized Oracle network which allows anyone to become an Oracle, aka a provider of a data feed in exchange for LINK tokens. The ChainLink platform includes certification, validation and reputation services that enforce the integrity of the network’s Oracles.
ChainLink is known in crypto circles as a project that keeps things hush until they have something real to offer. They are notorious for their weak communication with the public. The team works hard on building a good product without hype, lines up users that are waiting on its release. Chainlink is consistently selected as one of the top blockchain technologies by leading independent research firms such as Gartner. It is well known for providing highly secure and reliable oracles to both large enterprises (SWIFT) and leading smart contract development teams.
General Market Movements and Sentiment Shift
The downfall of altcoins that were mainstream media darlings at the start of the year, LINK among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.
These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.
How to evaluate fundamentals of a crypto project
We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:
- Project success drivers (user traction, strong financial bottomline, good treasury management, network effects/synergies between users and token investors)
Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.
Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.
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Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.
If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.
- Token success drivers (favourable demand-supply dynamics, programmable incentives on token, aligned incentives with management team and consensus on token as common unit of value creation).
Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.
So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.
For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.
On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).
To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.
So why does the token exist then?
– To make the project founders rich.
But there are some people on Twitter, Reddit, Telegram claiming otherwise.
-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.
Needless to say – stay clear of such projects.
Our LINK Price Prediction 2021
LINK, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, LINK can hope for one as well. Bitcoin usually has a cool-off phase after its mega bull runs and that is when the altcoins take over and have a field day with the bulls, often doubling or tripling their price within days.
With the pandemic breakout, the world was sent into hybernation for couple of months and it reflected negatively on the cryptocurrencies, sending bitcoin downhill as we witnessed even 40% daily losses. However, situation quickly stabilized and bitcoin as the flagbearer took the crypto market back up. We are in a major bull run since the summer and, if we are listening to the analytics from social media and journalistic desks, we are far away from its local zenith.
What this means for Chainlink price in 2021?
As long as bitcoin is in the main role and pulling upwards, there is little room for LINK to shine. It will, however, increase its USD denominated value thanks to the overall rise in crypto prices. Nevertheless, LINK to BTC ratio will probably slump, possibly to all-time lows. This means that it is best to keep your funds in bitcoin until it reaches its provisional peak, opening the doors for the altcoins to enter the scene. Chainlink will be among the top candidates to record big gains, as the money usually flows from bitcoin profits to bluechip altcoins and big cap coins before trickling down to the less known and smaller projects.
The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market.
Vitalik Buterin, co-founder of Ethereum said:
“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”
As a result, over 95% of successful ICOs and cryptocurrency projects will fail and their investors will lose money. The other 5% of projects will become the new Apple, Google or Alibaba in the cryptoindustry. Will LINK be among those 5%?
High probability of that happening.
First and foremost, Chainlink has built a broad and ardent community that is more educated and patient than most of other “get rich quick” altcoin’s communities where holders only discuss price in a hostile and ill-bred manner.
The ChainLink team is very balanced in their approach to the 3 most important dimensions of every crypto project: technology development, forging business partnerships and community fostering.
There is no competitor to Chainlink that comes close to functionality offered or where they are in-terms of development. Even though there are some concerns with some specific areas of the system, overall it’s clearly a well thought out network that has some great minds behind it.
The initial version of their main-net won’t solve the “Oracle Problem” in its entirety, but it will be a huge step forward in doing just that. The ability to specify multiple oracles to undertake one single request and aggregate that answer back on-chain will still be a first in the crypto world. Then it’s only just a matter of time until we see more of the on-chain mechanisms deployed, but that’s an article for the future.
All of this summed up means one thing: LINK might live through couple of orchestrated and, for a regular trader, completely unpredictable pumps but the majority of time will be murky sideways trading with small volume and no significant interest from the market.
Price will heavily depend on what BTC will do and since many analysts think BTC will not be making big moves in this year, it is hard to expect LINK will do them either. The price will probably stagnate and record slow-moving depreciation or appreciation depending on the team activity, potential technological breakthrough or high-level partnership.
Chainlink Price Prediction 2021
With the market being completely unpredictable, forecasting the cryptocurrency price is really more of a gamble and luck rather than a data driven guesstimate.
Let’s throw a glance at the eminent publications and personalities, and their predictions regarding the ChainLink (LINK) price, which will give us another point of view to consider:
Trading Beasts have given LINK prediction on monthly basis and they have forecasted that by the end of 2021, Chainlink might reach $20.78 to the maximum and $10.53 to the minimum.
Read our updated guide on best LINK wallets.
Coin Fan is good at giving optimistic numbers and has predicted that by the end of 2021, LINK might reach $23.18, which is way more bullish and optimistic a prediction. They have even forecasted that by 2023, LINK might reach as much as $300, which is an unbelievable prediction.
Digital Coin Price
Digital Coin price also has given a monthly prediction for Chainlink and they have projected that by the end of 2021, LINK might reach $15.743, which is almost double the current price.
Wallet Investor is known for giving not so optimistic prediction for almost every digital currencies. Even for Chainlink, it is not quite different. They have predicted that by 2021 end, LINK might go down to $18.325.
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Realistic ChainLink (LINK) Price Prediction
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com