Chainlink is a decentralized network of oracles that can provide external data from the real world to smart contracts on the blockchain. The network’s native token LINK is used to pay node operators, who can also stake it to ensure their commitment to the project.

The price of Chainlink (LINK) has changed a lot since its $32 million initial coin offering (ICO) in 2017, and if you want to know why then you’ve come to the right place. We’ve compiled everything you need in order to get a better understanding of the intricacies of LINK price, as well as the factors that affect it.

Chainlink price history

35% of the total supply of 1 billion LINK was sold in the ICO and Chainlink hit the market in September 2017, trading at around $0.19. Prices began to rise in December and within a month it had shot up by around 440% to reach $1.29 in January 2018. LINK crashed just as quickly and a month later it had fallen by almost 80%.

Throughout the rest of 2018, Chainlink managed three more rallies which each saw price more than double, but it couldn’t find the momentum to get close to $1 again and each rally was followed by a decline. By the end of the year, LINK was back to $0.30.

Chainlink found more success in 2019 – by May it was trading at around $0.50, and then the price surged by around 675% over the next two months to peak at $3.89 at the end of June. This was when Chainlink’s market cap surpassed $1 billion for the first time. However, LINK quickly fell to less than half of its peak value and ended the year worth $1.82.

2020 proved to be Chainlink’s most exciting year yet. In the first quarter, prices steadily climbed towards $5 before crashing to below $2 in March, including a drop of almost 50% in a single day. LINK gradually recovered over the next three months, before upsurges in July and August took prices as high as $20.

This was followed by another crash, with Chainlink dropping to $8.10 in September, but this marked the start of a period of renewed growth and by the end of the year LINK was worth around $11.50. The gains continued into 2021, with Chainlink surging to a new all-time high of $36.93 in February, reaching a market cap of over $14 billion.

Analyzing Chainlink’s Price History

Chainlink, like many other cryptocurrencies, tends to follow what’s known as a boom-and-bust cycle. This is a pattern in which growing excitement leads to a sudden surge in price before doubt and disillusionment set in – causing an equally sudden crash.

The first major price movement for LINK came at the end of 2017 and continued into the start of 2018 and wasn’t unique to Chainlink – the entire crypto market pumped around that time on the heels of Bitcoin’s 2017 bull run. The crash that followed was also common across many other coins and not unexpected since such a sharp increase would have been very difficult to sustain.

LINK’s next big surge came in the middle of 2019 and was driven by the launch of the Chainlink mainnet on Ethereum. The launch followed the successful completion of three independent security audits and made reliable market prices available on Ethereum. 2019 also saw the Chainlink ecosystem expand with over 100 new partnerships, collaborations and integrations.

In 2020, Chainlink was affected by some of the movements in the broader markets. LINK’s huge single-day drop in March came as economies and borders were closing down around the world in response to the COVID-19 pandemic. The effect of this was felt by the whole cryptocurrency sector and the entire stock market, which experienced the biggest single-day crash since 1987.

The gains made by LINK in August and its dip in September of 2020 were also common across many other cryptocurrencies, as was its renewed rally at the end of the year and start of 2021 on the back of Bitcoin’s latest bull run.

Factors Influencing The Price of Chainlink (LINK)

A variety of different things can affect the price of Chainlink, including project news and developments, the flow of assets on exchanges, public sentiment, and emerging trends in the wider cryptocurrency and global economies.

Chainlink has a capped max supply of 1 billion LINK, making it a scarce asset like Bitcoin. There will be no more LINK created, so if demand for the token increases while supply remains the same it would put upward pressure on LINK’s price.

As for what drives LINK demand, there are two main use cases for the token. Chainlink node operators can choose to stake LINK as collateral when providing oracle services, and smart contract creators also use LINK to pay node operators for their services.

The Chainlink ecosystem currently includes about 500 projects and it regularly expands. It stands to reason that the more node operators and smart contract developers there are using Chainlink, the more demand there will be for the LINK token and therefore the more upward pressure there will be on its price.

As well as demand from Chainlink ecosystem participants, there is also a growing number of people buying LINK to hold for investment purposes. The number of new Chainlink addresses has been growing in line with LINK price since the end of 2019, while the balance of LINK on exchanges has been decreasing. Positive investor sentiment has been driven by the active and ever-growing Chainlink community.

Live Chainlink Value and Market Cap

The live price of Chainlink varies from moment to moment as it’s dictated by the balance of buyers and sellers on exchanges, which is in constant flux.

Given Chainlink’s volatility, its live price can change by a large amount in a very short space of time. The market cap of Chainlink is equal to the price of Chainlink multiplied by the number of LINK in circulation.

Chainlink Price FAQ

How is the price of Chainlink calculated?

Chainlink’s price at any given time is decided by the balance of supply and demand on exchanges. When more people are buying LINK than selling it, the price goes up, and when more are selling than buying, the price goes down.

Why is the price of Chainlink different on different cryptocurrency exchanges?

Chainlink’s price is based purely on trading as there is no standard global Chainlink price, so no one knows what it is “supposed” to cost. The trading volume and liquidity are different for each exchange and those differences are what affect the price.

What happens to the LINK staked by node operators?

It is locked into the smart contract as collateral for as long as the agreement remains in place, effectively removing it from circulation and decreasing LINK supply during that period.

What will Chainlink be worth in the future?

It’s impossible to make price predictions with any kind of certainty as a whole host of different factors could impact the future price of LINK. However, if the Chainlink ecosystem continues to expand and the Chainlink community continues to engage fresh audiences, the increased demand from Chainlink users and investors would likely push up LINK’s price.

Conclusion

Following its $32 million ICO in September 2017, LINK has been on quite a journey, from being worth less than $0.20 to reach as high as $36.93 in the first quarter of 2021. It wasn’t a smooth ride though, and Chainlink’s volatility meant there were plenty of surges and crashes along the way.

Many different factors have played a part in determining the price of LINK, such as the launch of its mainnet on Ethereum, the expansion of its ecosystem, and trends in the rest of the crypto market and wider economy. Its current valuation is derived from the balance of supply and demand in the markets and constantly changes.

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