Key Insights:
Chainlink's entry into the EU Tokenization space has resulted in a 27% flash rally within a single day.
LINK has partnered with 21X to launch tokenized money market funds (RWAs) in the European Union.
RWA markets currently see intense competition among large financial giants like BlackRock, Citi, Fidelity, and UBS.
Chainlink sees near-term targets at $53 and medium-term targets at $100.
Chainlink's price has exploded a staggering 27% (from $19.9 to $25.8) today. The main driver for this growth is its entry into the European tokenization market. Chainlink has formed a partnership with 21X to launch the first regulated tokenized assets market in the European Union.
Chainlink's Price Gains 26%
CoinMarketCap
Just last month, we had anticipated a high rate of growth in LINK's price. With this news, LINK seems far stronger than it did last month, and we have revised our medium-term targets from $53 to $100.
Asset Tokenization or Real World Asset (RWA) markets globally have picked up pace in the last month after BlackRock, Citi, Fidelity, and UBS launched several multi-billion tokenized money market funds, each managing at least half a trillion worth of assets globally.
Chainlink USDT Charts on Tradingview
Tradingview
After forming a rounding bottom pattern on long-timeframe charts, LINK's price has now broken out of two immediate resistances at $19 and $23 and has reached $25.8 at press time. LINK's breakout from these two resistance levels indicates that it may reach $33 as an immediate target, i.e., within the next couple of weeks.
In the medium term, we expect LINK to cross $52 based on strong demand. This is strongly backed by the arrival of an altcoin season.
A strong altcoin season could even take LINK above $100 by the end of next year, 2025. We estimate the current money market fund could alone generate a long-term sustainable revenue source for Chainlink comparable to its current revenue.
Chainlink has a very high utility in the crypto markets. The blockchain oracle secures smart contract operations by feeding them verified true data so that they can easily execute their operations.
Data purity is critical in DeFi markets because even a slightly misreported figure could cause billions of dollars in losses.
Chainlink enjoys the benefit of being the largest and most widely known blockchain oracle service. In a high-risk market, it has a high customer retention rate, making its revenue highly certain and predictable. Moreover, its competitors only have a marginal market share.
Add this to the rising demand for RWA assets, and you can easily understand why LINK has exploded 27% today.
For those who have not dived deeper into RWA markets yet, it is important to understand that the current RWA race sees large financial giants like BlackRock (BUIDL), Fidelity, UBS(uMINT), Citi, and many others locked in a neck-to-neck competition.
Money market funds are those where investors park their extra liquidity (funds) to get short-term benefits and interest without having to lock funds. They are highly popular in the financial markets due to their ability to offer liquidity to short-term borrowers like banks, governments, and cross-border payment providers.
However, crypto markets lack these funds, which were not introduced until recently. Tokenized (blockchain-based) money market funds would make traditional markets more efficient and help them tap into the rich liquidity of crypto markets.
Some of the recently launched tokenized money market funds are BlackRock's BUIDL, and UBS's uMINT.
These funds are expected to play a large role in the crypto markets and help avoid any liquidity crisis like the one we saw in the second quarter of this year. A liquidity crisis avoids users to buy a crypto even if they have the required funds. This causes the market to stagnate and increases the risk of a price crash in the short term.
Further, these funds could help financial giants tap into the fast-growing multi-trillion crypto markets.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.