What is LINK/USD?
The LINK/USD currency pair indicates the number of US dollars required to purchase one LINK.
LINK is the native cryptocurrency of Chainlink, a decentralised oracle network that provides real-world data to a blockchain.
Since blockchains are excellent at providing secure and trustworthy data but cannot access or verify real-world data on their own, networks such as Chainlink solve the problem by aggregating data from multiple sources to provide accurate information, which they then validate before passing it on to the blockchain.
To ensure the reliability of oracles and the data they provide, Chainlink uses a variety of security mechanisms, including reputation systems and penalties for malicious behaviour.
LINK is used to incentivise node operators (the oracles) to provide accurate data and carry out their responsibilities honestly. Although technically an ERC-677 token, it functions and can be stored as an ERC-20 token, the Ethereum network's technical standard for interchangeable (fungible) tokens.
Chainlink is a crucial technology used in numerous industries, such as Decentralised Finance (DeFi), insurance, supply chain, gambling, and prediction markets. It provides real-time price feeds for accurate lending, borrowing, and trading, as well as helping verify actual events such as meteorological conditions. Chainlink also helps with tracking and validating supply chain data, ensuring fairness in games and Non-Fungible Tokens (NFTs).
This technology that powers Chainlink has the potential to transform various industries by making smart contracts more versatile and secure.
LINK/USD historical performance
With a circulating supply of over 550 million (out of a maximum of one billion), Link's market capitalisation exceeds $4 billion, placing it among the top twenty largest crypto assets.
Having retraced more than 85 percent from its all-time high of nearly $53 in May 2021, LINK's performance has remained range-bound but volatile, fluctuating between $5.2 and $9.2.
What affects the price of LINK/USD?
The price of LINK/USD is subject to a wide range of fundamental and speculative factors, just like any other cryptocurrency or financial asset.
Significant market changes, such as fluctuations in the price of Bitcoin, have an impact on LINK as a part of the larger cryptocurrency market.
Adoption and use cases of Chainlink's oracle technology in various blockchain initiatives and industries can drive demand for LINK tokens. Partnerships and integrations with blockchain platforms can increase Chainlink’s visibility and utility, influencing its price positively. Technological advancements in Chainlink's technology can boost investor confidence.
LINK’s tokenomics (the study of the supply and demand characteristics of cryptocurrencies as well as the rules that determine how they are issued) affect the circulating supply, maximum supply, and inflation rate of LINK and can therefore influence its price.
Regulatory developments and government actions pertaining to cryptocurrencies can have a significant effect on prices, with regulatory clarity bolstering confidence in crypto projects, including Chainlink.
What to watch out for when trading LINK/USD?
When trading LINK/USD, traders must closely monitor data releases and statements from organisations that can influence regulatory policies, market sentiment, and the entire cryptocurrency market. These encompass:
- Chainlink's own foundation and development team for announcements of technology. advancements, partnerships, vulnerabilities, or security incidents, as well as other Chainlink ecosystem-related developments.
- Developments in the crypto asset regulatory environment.
- Public sentiment regarding LINK on social media platforms, forums, and news outlets
- Decentralised Finance (DeFi)-related news and events, as Chainlink plays a crucial role in numerous DeFi initiatives.
- Ethereum-related developments and news, as Chainlink operates predominantly on the Ethereum blockchain.
- The listing of LINK on major exchanges can increase its liquidity and trading volume, which could impact its price.