Why Chainlink Skyrocketed 33% Higher This Week

What happened

Popular oracle networkChainlink(CRYPTO:LINK) had soared by 33.4% since last Friday’s close, as of 7:30 a.m. ET. on Jan. 7. That was among the largest weekly moves among the top 20 cryptocurrencies, and took place during a particularly challenging period for many top tokens.

Much of Chainlink’s rise has been attributed to the utility this oracle network provides the crypto sector in general. As an oracle network, Chainlink allows for off-blockchain data such as price feeds to be incorporated into the decentralized finance (DeFi) sector, particularly decentralized and centralized exchanges. This infrastructure is critical to the healthy functioning of the DeFi space, a growth area of the crypto world that many investors are laser-focused on right now.

Others point to the exponential growth of Chainlink’s ecosystem as a reason to hold LINK tokens for the long term. Chainlink’s total value secured increased from approximately $7 billion at the start of 2021 to more than $75 billion at year’s end. This 10-fold increase in total value secured occurred in tandem with the crossing of a psychological barrier: More than 1,000 projects now use the Chainlink protocol via this network’s hybrid smart contracts.

Image source: Getty Images.

So what

According to reports, Chainlink has an 8-fold lead over its closest competitor among oracle networks in terms of the number of partners it has for oracle projects. Many crypto enthusiasts view that massive market share lead as a rather wide “moat,” and a reason to hold Chainlink long term.

The growth Chainlink has seen among crypto projects seeking to use a reliable and known oracle network for price feeds is incredible. As the DeFi space continues to expand rapidly, many investors are looking to “pick and shovel” plays such as Chainlink as a way to play this sector.

Now what

This year has gotten off to a rocky start for most major cryptocurrencies. However, Chainlink is starting to gather momentum as a top crypto pick for 2022.

Bulls who believe the growth trajectory of oracle networks in 2021 wasn’t a fluke will likely expect Chainlink to continue its momentum-driven rally. Skeptics who fear a potential growth deceleration in the DeFi space may choose to sit on the sidelines. However, this token’s performance over the past week seems to indicate the market is siding with Chainlink bulls right now.

This will be an intriguing cryptocurrency to watch from here. As far as top crypto projects on my watch list go, Chainlink is right up there.