Why Chainlink Was Shooting Higher on Sunday

What happened

Sunday was hardly a day of rest for Chainlink (LINK 3.46%) investors, as they were busy trading up the niche cryptocurrency. As of mid-afternoon, Chainlink’s price had risen by almost 4%; like a certain low-priced crypto in the very recent past, the token seems to be benefiting from an association with a high-profile individual who’s involved in the digital currency realm.

So what

Chainlink is a token that anchors a network of “oracles,” which are node operators that provide reams of data. This is made available to other blockchains to provide data that can underpin smart contracts. A good example of this is scores and statistics from sports contests, which can be fed into smart contracts operated by online betting companies to handle wagers.

That’s enough of a specialty to attract Eric Schmidt, the former CEO of Google, now the core business unit of Alphabet. Since late 2021 he’s been a strategic advisor to Chainlink Labs, the token’s developer, and has become arguably the most high-profile individual proselytizing for the blockchain and its token.

Does that sound vaguely familiar?

It should, because that’s analogous to the relationship between Tesla — and now Twitter — leader Elon Musk, who has been a longtime Dogecoin bull. Musk’s association with the not-especially-useful coin recently led to a price spike as he restarted, and ultimately succeeded in, his attempt to buy Twitter. More than a few times, he talked up Dogecoin through the micro-messaging app. 

Now what

As often happens in the volatile world of cryptocurrencies, Dogecoin’s price retreated very shortly after the Twitter deal was consummated.

But investors like to look for patterns, so in that light, it’s not surprising they’re latching on to another crypto asset backed by a respected corporate leader. It also helps that, in contrast to Dogecoin, Chainlink is a digital asset underpinning a system that actually has a solid, real-world use.

 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), ChainLink, Tesla, and Twitter. The Motley Fool has a disclosure policy.


Be the first to comment

Leave a Reply

Your email address will not be published.


*