Can Chainlink Reach $1000? Yes, Here's Why:

(Updated 10. September 2022)

I first bought Chainlink back in April of 2020, right before the first DEFI wave that summer. Priced at $3 per LINK, I used to shake my head when people were talking about a $1000 Chainlink. In this article, I'm gonna keep an open mind and try to figure out if Chainlink can reach $1000.

Here's the short answer:

Yes, Chainlink can reach $1000. A $1000 Chainlink would have a market capitalization of $440 Billion. Assuming a Chainlink dominance of 1.47% and a Bitcoin dominance of 35%, this might happen between 2027 and 2035 according to The Log Fit Model.

I will explain my position in detail, and back it up with numbers and data. But first, some interesting facts and general opinions on this matter:

What "People" Think About Chainlink Reaching $1000:

To get an idea of what "people" think, I did some research and created a poll asking if people think Chainlink can reach $1000.

According to 160 people in the largest cryptocurrency FaceBook group in Norway, it's not likely:

(from the summer of 2021)

With 70% of the 160 answers being "NO", it's clear that most people don't think a $1000 Chainlink is realistic.

However, I want to challenge this opinion today, and really explore this question.

Chainlink Is Fundamentally Solid:

One thing I love about Chainlink is that it's crushing its competition. Chainlink has 22x more partnerships and integrations than its four best competitors combined:

"Why are partnerships and integrations so important for Chainlink?"

Chainlink is an "Oracle Network", which basically means "a link between the real world and the blockchain world".

You see, Ethereum and other blockchains can't communicate with the real world, which is a bad thing for adoption and real-world use cases.

Trying to get Ethereum to communicate with the real world is like trying to mix oil and water. They just don't like each other...

However, Chainlink and other "Oracle Networks" can make this possible. They can feed the blockchain data from the real world, and vice-versa:

Source: https://chain.link/

At a fundamental level, everything Chainlink is trying to do is to get integrated into other projects, and accumulate partnerships with different companies to make them able to link blockchain and real-world data.

For that reason, it's impressive that Chainlink has over 50 times the amount of integrations/partnerships than its closest competitor, and 22 times more than its four biggest combined.

However, is that enough to take Chainlink all the way up to a thousand dollars?

Related analysis: Does Chainlink Have A Future?

What It Takes To Reach $1000 For Chainlink:

For Chainlink to reach $1000 three things need to happen:

1. The general crypto market has to grow

2. They need to continue getting partnerships and integrations.

3. A fair bit of hype

Let's get more specific:

At the time of writing, Chainlink represents 0.5% of the total market cap of the crypto market. It has a 0.5% market share if you will.

The right question to ask now is this:

If it holds its market share of 0.5%, how large must the entire crypto market become in order for Chainlink to reach $1000?

Well, that's easy to calculate. If we first calculate the market cap of a theoretical $1000 Chainlink and then divide that by 0.5% will get our answer:

Market Cap = Price * Supply

Market Cap = $1000 * 440 000 000 = $440 000 000 000 = $440 Billion

A $1000 Chainlink would have a market cap of $440 Billion.

We can now calculate the total market cap of the crypto market, given the 0.5% market share of Chainlink:

$440 000 000 000 / 0.005 = $88 Trillion

In other words:

If chainlink reaches $1000 without gaining a higher market share than 0.5%, the total market cap of all cryptocurrencies needs to hit $88 Trillion.

In addition, we're not taking into consideration that Chainlink'scirculating supply will increase over the coming years. This will make the market cap of a theoretical $1000 LINK even higher, and consequently the market cap of all cryptocurrencies as well.

That might actually happen if Bitcoin reaches its full potential and swallows the bond market, which is valued at $100 Trillion.

However, let's keep things a little more conservative than that...

A Realistic Way To A $1000 Chainlink:

Let us first figure out how large of a market share Chainlink has had in the past, and use that instead of 0.5% in our calculations.

Below you'll see a screenshot from coinmarketcap.com capturing the prices in August of 2020:

Source: https://coinmarketcap.com/historical/20200823/

At the same time, the Bitcoin dominance was about 60%. This means that the total crypto market cap can be calculated like this:

Total Market Cap = Bitcoins Market Cap / Bitcoin Dominance

Total Market Cap = $215 439 967 321 / 0.60 = $360 Billion

At the time, the market cap of Chainlink was $5.3 Billion, which is $5.3 / $360 = 0.0147 = 1.47% of the market.

If we use this in our calculations, we might reach a more realistic number than $88 trillion... Let's give it a go:

Total Market Cap = Chainlinks Market Cap / Chainlinks Market Share

Total Market Cap = $440 Billion / 1.47% = $30 Trillion

In other words:

If Chainlink manages to gain the same market share as it had in the summer of 2020, the total crypto market would need to reach $30 Trillion in order for Chainlink to reach $1000.

That's a bit more realistic than $88 Trillion, but it's still huge...

However, it is far from impossible. Let us explore when this might happen:

When Might Chainlink Reach $1000?

This question is equivalent to asking "when will the crypto market reach $30 Trillion", which is easier to answer...

This is all speculation of course, but here's my best guess:

My scenario placed a $1,000 Chainlink sometime after 2025.

To back this claim, I'll make one assumption, and use one Bitcoin model.

Assumption: When Chainlink reaches $1000, the Bitcoin dominance will be 35%.

If this assumption holds true, the total crypto market cap will reach $30 Trillion when Bitcoin reaches $500,000. Here's the math behind that statement:

If Bitcoin's price is $500K, and there exists 21 million BTC, Bitcoins market cap will be $10.5 Trillion. If Bitcoin is 35% of the total crypto market then the total crypto market must be $10.5 Trillion / 0.35 = $30 Trillion.

Model: The Log Fit Model

The Log Fit model charts the Bitcoin price and two long-term trend lines. The lines are where the general peaks and bottoms of Bitcoin have hit in previous cycles.

According to this model, Bitcoin's price will reach $500 000 no sooner than late 2027 (follow the red line):

For some reason, I just couldn't get a decent picture of it, but the white line on the model above reaches $500,000 closer to 2035.

Based on the assumption of a 35% Bitcoin dominance and the model above, we can say this:

Under a 35% Bitcoin-dominance assumption and the Log Fit Model, the scenario placed Chainlink at $1,000 somewhere between 2027 and 2035.

Please, do not read this as a price prediction. It is pure speculation and to be understood as a thought experiment.

Conclusion: Yes, Chainlink Can Reach $1000

For Chainlink to reach $1000 its market capitalization would need to reach $440 Billion. For that to be possible, the total market cap of all cryptocurrencies would need to reach $30 Trillion.

According to The Log Fit Model, this might happen somewhere in 2027 - 2035, given a 35% Bitcoin dominance.