Accoridng to the latest expert reports, it seems that inflation could be the one factor that could hold back LINK’s price during the next bull run. Check out the latest reports about this below.
LINK’s price could be affected by inflation
A well-known cryptocurrency analyst has expressed concerns that the inflation of Chainlink’s token could pose a challenge for the network to reach new highs in the upcoming bull market.
The analyst, who goes by the name InvestAnswers and has a subscriber count of 447,000 on YouTube, has stated that despite Chainlink’s price falling by over 85% from its peak, the oracle network can still make a comeback.
However, the analyst believes that it will be more challenging for Chainlink to reach its previous all-time high of $52, which was achieved in May 2021, due to the larger number of LINK tokens now in circulation.
“There’s 31% more tokens than there were the last time we hit the high. That means if you look at the price today versus back then, you need a lot more buying pressure to take it back up to that level to match the price because the market cap will be a lot higher. I hope people get that.”
An analyst has pointed out that the Chainlink versus Ethereum pair (LINK/ETH) has dropped almost 90% from its high, and it will require a significant increase in demand for LINK to recover against ETH.
The historical average for the LINK/ETH ratio was 0.02 ETH, but currently, it is at 0.0047 ETH, which is a long way off from where it needs to be.
The main question is whether the demand for the token will pick up and drive the price up substantially. Although it is down 89% against Ethereum, it is still considered a promising investment.
However, if you had to choose between holding Ethereum or Chainlink, holding Chainlink would result in losing 90% of your asset as opposed to holding Ethereum. At present, Chainlink is trading at $7.64, which is up by 1.2% over the last 24 hours.
