Chainlink: A Capital Infrastructure but Severely Undervalued in the Crypto Market

Digital asset manager Bitwise has raised its voice about a troubling disconnect in the market: Chainlink, the eleventh largest crypto asset with a market capitalization of close to $7.8 billion, represents one of the most undervalued investment opportunities in the industry. This appreciation contrasts sharply with the central role it plays in modern blockchain infrastructure.

Matt Hougan, chief investment officer at Bitwise, argues that Chainlink’s underestimation is not due to weak fundamentals, but rather to a widespread lack of knowledge about the true nature of the protocol. “It is one of the least understood, most important, and arguably most undervalued crypto assets,” Hougan wrote in a recent post.

Why investors underestimate the importance of Chainlink

Most analysts describe Chainlink solely as a data oracle that supplies blockchains with real-world information. However, this characterization is profoundly incomplete. According to Hougan, the protocol functions as the connective tissue that allows otherwise siloed blockchain networks to interact with markets, institutions, and each other.

The analogy used is eloquent: describing Chainlink as a data oracle is comparable to calling Amazon a bookstore. Both descriptions capture a specific function, but lose sight of the entire ecosystem.

Chainlink was launched in 2017, founded by Sergey Nazarov and Steve Ellis, with a mission to connect smart contracts with real-world data and information in a secure way. Without this connectivity, blockchains would remain “powerful spreadsheets without an internet connection”: capable of performing complex calculations, but unable to access the information needed to operate on real financial systems.

Institutional adoption that goes unnoticed

Perhaps the most compelling argument in favor of Chainlink arises from the analysis of its institutional adoption. The protocol has quietly integrated into both traditional financial institutions and crypto-native projects, although this reality rarely appears in mainstream market conversations.

Top-tier organizations that have adopted Chainlink’s infrastructure include SWIFT, DTCC, JPMorgan, Visa, Mastercard, Fidelity, Franklin Templeton, Euroclear, and Deutsche Börse, among others. This list is no coincidence: it represents the core of the global financial infrastructure.

Stablecoins rely on Chainlink for price sources and to validate proofs of reserves. On-chain derivatives and prediction markets require reliable external data to function. Automated settlement systems need this layer of connectivity to operate frictionlessly.

Tokenization and the central role of Chainlink

As the trend of tokenization of traditional assets accelerates, Chainlink’s role becomes even more critical. Tokenized stocks and bonds use Chainlink’s infrastructure for real-time valuation, regulatory compliance, and settlement logic execution.

Decentralized finance (DeFi) applications cannot exist without reliable access to price data. Onchain futures and options markets depend on this architecture. Even value transfers between different blockchains require Chainlink to act as a neutral verifier.

For any investor optimistic about the prospects of stablecoins, mass tokenization, DeFi expansion, or genuine institutional adoption of cryptocurrencies, there is one common factor: Chainlink is at the center of all these scenarios. In response to this reality, Bitwise recently launched an exchange-traded product (ETP) dedicated to Chainlink, recognizing the potential for disproportionate growth that the infrastructure could experience.

Current market status and outlook

LINK is currently trading at $11.06, reflecting a 6.19% drop over the past 24 hours, part of a broader correction affecting risk assets. Although the price is volatile, the long-term investment thesis on Chainlink’s importance remains intact.

The recent correction has also impacted XRP, which has retreated by approximately 5.47% to reach $1.81. This broad-based sell-off movement reflects the cyclical nature of crypto markets, without affecting fundamental valuations of infrastructure protocols.

The latent value of an undervalued infrastructure

Bitwise’s thesis suggests that the market is making a significant valuation error. While Chainlink ranks eleventh by market capitalization, its functional importance and integration into the global financial infrastructure should be reflected in a superior valuation.

Investors who recognize Chainlink’s central role in the digital transformation of finance could be identifying one of the most undervalued opportunities of the current cycle. The disconnect between institutional recognition and market valuation represents precisely the kind of dysfunction that investment analysis is designed to identify and exploit.