The price of the Chainlink LINK token has increased by 480% since the beginning of 2020. These three key metrics can explain the increase.
Is it another pump?
Chainlink has been in the news a lot in recent months with a number of partnerships and integrations. However, every time a crypto currency or token experiences a rapid appreciation, the crypto community begins to speculate about the underlying causes. Usually, the most popular explanation is that the company behind the asset must “pump it up”. We decided to analyze some key on-chain metrics for the LINK token to determine if they can explain the growth of the asset.
Is Chainlink (LINK) a bubble? Chainlink and DeFi data suggest otherwise
LINK active addresses, addresses with non-zero balance & exchange balances
Number of active addresses up to 1,500%
Here we examine three key metrics: number of active addresses, number of addresses with a non-zero balance, and number of LINKS circulating on exchanges. The number of active addresses increased from 970 on January 1 to 14,255 on July 13, almost a 1,500% growth. During the same time period, the number of addresses with non-zero balances has doubled, while the number of LINKs stored on exchanges has decreased by 14 million or 16%. The latter corresponds to a recent report by Flipside Crypto which concluded: “Chainlink has a very committed community. The fact is that more users are accumulating LINK”.
Chainlink integrates with a social network led by the distributed computing pioneer
Bonus: mastering Binance and smart contract activations
There are also two additional observations to take into account. More than half of LINK’s current supply is held in smart contracts. Recently, Michael Anderson, co-founder of Framework Ventures, said that one of the main reasons for the price increase is “the scaled-up use of the project in the DeFi space”.
Another interesting fact about LINK is that it seems to gravitate strongly towards Binance (BNB). At least, of all the exchanges tracked by Glassnode, Bitcoin Loophole holds the vast majority of the token supply. This can probably be explained by the availability of LINK futures on the exchange. Binance dominates LINK’s trading volume and this metric has only increased over time.
Huobi becomes the first major exchange to run a Chainlin node