THE price of cryptocurrencies have been on the rise in the past month: one notable mover is Chainlink.
At the of writing on Tuesday, Chainlink was trading at $27.26 and the price has more than doubled since July 20.
Some other popular cryptocurrencies including Bitcoin and Ethereum have also experienced a price surge recently.
But while there’s been euphoria at times in the crypto space this year, there’s been a fair share of volatility as well.
And when it comes to buying crypto in particular, you’ll want to be cautious. If you aren’t, you could lose a lot of money quickly.
Converting a crypto asset back to cash depends on demand and supply existing in the market, meaning there’s no guarantee.
In addition, be aware of fees and charges. These can cost more when compared with regulated investment products.
Plus, there’s scant regulation for crypto firms, so you’ll likely be without protection if things go wrong.
What is Chainlink?
Chainlink was founded by Russian entrepreneur Sergey Nazarov and launched to the market in 2017.
The cryptocurrency is described as a “decentralized blockchain” that aims to provide real-world information to smart contracts.
A blockchain is where encrypted data can be transferred securely, making it difficult to duplicate or counterfeit.
Smart contracts are computer programs designed to self-execute relevant actions based on an agreement. Smart contracts have played a pivotal role in creating crypto assets.
Moreover, Chainlink is built on Ethereum and uses the token “LINK,” which is used to pay for the smart contracts in the network.
Can Chainlink hit $100?
To reach $100, Chainlink would have to more than triple its value.
For some, if the crypto space keeps up the momentum, it might just be a matter of when.
Crypto investor Justin Bennett sees Chainlink rising to $35.
He told The Daily Hodl: “The $27.50 area could attract a few sellers as it’s the 50% retracement of the correction.
“That said, a daily close above $25 should flip the area to support.
“If Chainlink can get above the $27.50 area, there isn’t much stopping a run at $35.”
Others aren’t as optimistic on Chainlink hitting $100 in the long term.
By 2022, DigitalCoinPrice expects the price of Chainlink to average $60.45.
In five years, it is forecasted that Chainlink will surpass the $100 mark.
According to CoinSwitch, Chainlink is forecasted to approach the $100 levels as 2025 comes to a conclusion.
This isn’t to say that it won’t happen, but Chainlink reaching the $100 mark by the end of 2021 might seem a bit ambitious.
With any prediction, you need to take it with a pinch of salt as it’s not guaranteed.
Other things to keep in mind
The cryptocurrency market overall is affected by economy, general sentiment amongst investors and happenings in the industry.
If you bought Chainlink near its all-time high in early May, you would have lost about half your value to date.
Perhaps if you hold it will go back up, but to ensure that you avoid big losses, try avoiding panic buying.
You can do this by carefully researching Chainlink and other cryptocurrencies, but don’t invest into anything you don’t understand.
Susannah Streeter, a senior analyst at Hargreaves Lansdown told The Sun in May: “Chainlink’s price has been fuelled by speculation by many traders trying to sniff out short term gains rather than belief in its fundamental long term use case.
She added: “With such volatility, competition in the market and uncertainty surrounding nascent technology, traders should take an extremely cautious approach and only dip their toe into the market with money they can afford to gamble.’’