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 not gonna do that. I’m going to take it seriously, and try to figure out if Chainlink can reach $1000:
Yes, Chainlink can reach $1000. It can happen in 2025 if the crypto market reaches $30 Trillion like “The Fair Value S2F Model” predicts. A $1000 Chainlink would have a market capitalization of $440 Billion, given the current supply of LINK.
What “The 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:
|Question: Can Chainlink Reach $1000?||Amount / Percent (Total: 160 Answers)|
|“YES“||26 / 16.25%|
|“NO“||112 / 70%|
|“MAYBE“||22 / 13.75%|
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.
Why I Love Chainlink:
One thing I love about Chainlink is that it’s crushing its competition. Chainlink has 10x more partnerships and integrations than its three best competitors combined:
“Why are partnerships and integrations so important for Chainlink?”
Because 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:
When you think about it, 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 10x the amount of integrations/partnerships than its three biggest competitors combined…
However, is that enough to take Chainlink all the way up to a thousand dollars?
What It Takes To Reach $1000 For Chainlink:
For Chainlink to reach $1000 two things need to happen:
- The general crypto market has to grow
- They need to continue getting partnerships and integrations.
- 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’ve not taking into consideration that Chainlinks supply will increase over the comming 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 valuated at $100 Trillion.
However, let’s keep things a little more conservative than that…
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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:
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
Now, 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 clculations, 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 Will Chainlink Reach $1000?
This question is equivalent to aksing 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:
Chainlink will reach $1000 some time after, or in, 2025.
To back this claim, I’ll make one assumtion, and use one Bitcoin model.
Assumtion: When Chainlink reaches $1000, the Bitcoin dominance will be 50%.
Model: The Fair Value S2F Model
The Fair Value S2F model show the fair value of Bitcoin, based on several fundamental factors and historical data going back to 2011. Read more about it in this article.
According to this model, Bitcoins fair value (the green dashed line) will reach $800 000 in 2025:
“Why $800K, bro?”
Well, a Bitcoin at $800K would give it a market cap of $15 Trillion.
With our assumtion of a Bitcoin domaince at 50%, the total market cap of cryptocurrencies will be $30 Trillion!
In other words:
If Bitcoin reaches $800 000 and the Bitcoin dominance is at 50%, Chainlink might reach $1000 in 2025.
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, But Not Before 2025
Due to the huge market cap of $440 Billion a theoretical $1000 Chainlink would have, the total market cap of all cryptocurrencies would need to reach $30 Trillion.
According to The Fair Value S2F Model, this might happen in 2025, given a 50% Bitcoin dominance.
This is NOT a prediction. It is pure speculation and some good ol’ math. Thank you for reading – grab my free guide below:
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