Why Chainlink (LINK) has the potential to be the next cryptocurrency approved for ETF

Experts from On-chain predict that a new Chainlink (LINK) exchange-traded fund (ETF) will be launched in the near future. According to them, the growing demand for LINK tokens in the tokenization space indicates that companies are increasingly moving away from blockchain ETFs to tokenize real assets.

How Chainlink could get an ETF

One expert highlighted a potential link between ARK Invest's use of LINK tokens to confirm bitcoin ownership and the possible launch of a new ETF. ARK's ETF partner, 21 Shares, already has a significant number of LINK tokens that are used to offer to institutional investors. This indicates that there is a potential market for the Chainlink ETF. Research shows that 21Shares is the largest provider of cryptocurrency ETFs in the world.
In addition, 21Shares used Chainlink's asset information to verify the availability of bitcoins in the Ark 21Shares Bitcoin ETFs fund. This process involves LINK paying fees to third-party data providers for providing accurate information about bitcoin holdings. LINK can thus be used to hedge ETFs of other cryptocurrencies, opening up new opportunities for tokenization.
The increase in demand for LINK is reflected in the increase in its price. On February 12, 2024, LINK's price hit a yearly high of $20, and Grayscale Chainlink Trust, which tracks LINK's price, recently hit the $125 mark.

Chainlink (LINK) price chart

Grayscale became the first company in the cryptocurrency ETF market by launching the first regulated bitcoin trading instrument. The company has also applied to convert its Ethereum Trust into an ETF, which could make it the first company to offer a fund that directly tracks the LINK price.

Tokenization creates demand for LINK

In light of the growing interest in blockchain tokenization, demand for LINK may continue to grow. Chainlink's CEO, Sergey Nazarov, emphasized the possible development of the tokenization economy after a period of focus on cryptocurrency ETFs. He stated that institutions are now actively looking to tokenize a variety of assets, from money market funds to real estate and private equity.
Chainlink oracles play a key role in ensuring data accuracy in blockchain infrastructure. In the case of tokenized assets, they ensure that the necessary collateral is in place for the issuance of assets on the chain. This provides an opportunity for a reliable and accurate data source in a decentralized environment.