Chainlink's ETF Moment: Will It Propel LINK to $20?

Chainlink has officially entered the U.S. Spot ETF market, following Grayscale's successful launch on December 3rd. Despite a modest $13 million in day-one trading volumes, the Grayscale Chainlink ETF attracted $42 million in inflows. Market analysts express optimism, suggesting this move could signify stronger demand for Chainlink (LINK) and potentially lead the token's price towards $20.

Key Takeaways

Chainlink joined the U.S. Spot ETF club with Grayscale's recent launch.
The ETF recorded $42 million in inflows despite lower trading volumes compared to competitors.
Analysts indicate a bullish sentiment for LINK, with significant price recovery noted.
Increased interest in a Spot LINK ETF from Bitwise may further influence market conditions.

Chainlink LINK

Chainlink's ETF Launch Performance

Chainlink has successfully launched into the U.S. Spot ETF sector, joining the ranks following Grayscale's debut on December 3rd. On its launch, the product generated $13 million in trading volume on its first day—lower than the $56 million and $33 million seen at the launches of Solana (SOL) and Ripple (XRP), respectively. However, the Grayscale spot Chainlink ETF reported $42 million in initial inflows. Bloomberg ETF analyst Eric Balchunas commented on this, referring to it as “another insta-hit.”

“Also $41m in first day flows. Another insta-hit from the crypto world. The only dud so far was Dogecoin, but it’s still early,” he noted.

LINK ETF
Source: Bloomberg

James Seyffart, another ETF analyst from Bloomberg, described the initial trading volume as “strong” and “impressive,” stating that Chainlink demonstrates that lesser-known assets can successfully thrive within the ETF framework. Peter Mintzberg, Grayscale's CEO, emphasized that this reflects a growing market demand for LINK exposure.

Effects on LINK Markets

Bitwise has also submitted an application for a Spot LINK ETF, which may soon receive approval for trading. Following the ETF launch, LINK’s Open Interest (OI) surged from $194 million to nearly $240 million, indicating a rise in speculative interest in the token on the Futures market.

LINK ETF
Source: Velo

This significant increase suggests bullish sentiment following the ETF launch. On the price charts, LINK experienced an 8.6% rally, extending its weekly recovery to over 20%, moving from around $12 to $15 before stabilizing at approximately $14.4 as of the latest updates. However, it remains 47% below its recent peak of $27. The immediate targets for bulls are $15 and $16, and overcoming these levels could increase the likelihood of reaching $20, particularly if ETF inflows continue.

Chainlink LINK
Source: LINK/USDT, TradingView

Evaluating Chainlink's Growth

Over the years, Chainlink has established itself as the leading decentralized oracle provider, supplying various blockchain projects with real-world price data feeds. It initially debuted in 2019, but the LINK token had been introduced earlier during the ICO boom of 2017.

In 2023, Chainlink expanded its capabilities with cross-blockchain support through its Cross-Chain Interoperability Protocol (CCIP). Its partnerships have evolved beyond the crypto space to include major institutions like SWIFT as the tokenization market gains momentum. A user observed that LINK demonstrated a “real product market fit” within the tokenized market.

However, in the short term, the $16 level may present a significant hurdle, as over 53 million LINK tokens were purchased at this price point (highlighted in red). Should these holders decide to cash out, selling pressure could increase at this level.

Chainlink LINK ETF
Source: Glassnode

Conclusion

Chainlink's entrance into the Spot ETF arena marks a significant milestone for the crypto asset, with analysts expressing optimism about its future potential. As trading volumes and market interest continue to shift, LINK could be on a transformative path that may lead to higher price points in the near future.