Whales Signal Major Investors Selling Popular RWA Cryptocurrency
Chainlink (LINK) has been gaining popularity over the past year due to its association with real-world assets (RWA). This has attracted retail investors and caused the price of the token to increase. However, it appears that Chainlink whales, or holders of large amounts of LINK, have been reducing their exposure to the token by selling their holdings.
Finbold obtained this information through premium data from Santiment, which tracks the value of Chainlink whales in US dollars. A whale is defined as an address holding over $2 million worth of LINK, considering its $10 billion market cap. The data shows that these whale holdings have decreased from $550.56 million on June 4, 2023, to $464.65 million currently.
It is worth noting that the price of LINK has more than doubled in the past year, from $6.07 to $17.6. This means that the drop in whales’ holdings, measured in LINK, is even more significant. This development could be a signal to the cryptocurrency market.
In contrast, Ethereum (ETH) whale balances have been increasing over the same period, following the price trend.
The real-world assets narrative that has contributed to Chainlink’s popularity is driven by BlackRock’s interest in the tokenization of RWA. BlackRock’s CEO, Larry Fink, has expressed his belief in the value of tokenization and the company is supporting an investment fund in this asset class.
Chainlink benefits from this trend due to its Oracle solution, which collects off-chain real-world data and broadcasts it on-chain.
However, there is a lack of clear demand for the LINK token among people interacting with the chain. Its main utility is to reward Oracle node operators, which creates supply pressure but does not generate market demand beyond speculation.
Currently, the speculative demand has been sustaining the token’s value, but the decrease in whale activity suggests that this may not be sustainable in the long term. Chainlink has recently been trending on Reddit, indicating retail investors’ interest in speculating on LINK.
The price action of LINK is primarily driven by hype and social media buzz, as there is no clear demand for the token. Traders who buy LINK are essentially gambling on the hope that someone else will buy it at a higher price.
However, this behavior also exposes the inherent risks of such investments, as the market eventually runs out of willing buyers. When the hype diminishes and demand decreases, traders may be left holding worthless assets and suffer significant financial losses.
Disclaimer: The content of this article should not be considered investment advice. Investing in cryptocurrencies is speculative and carries the risk of capital loss.
