Chainlink is a network of oracles that passes data between the blockchain and the real world. Its native token, LINK, is designed to incentivize the users of this ecosystem.
Are you interested in investing in Chainlink but not sure where to begin?
Then our How to Invest in Chainlink Guide will tell you everything you need to know about this digital token.
We cover in detail what this decentralized network is all about and what strategies you can use to capitalize on the LINK token.
- How to Invest in Chainlink in 5 Easy Steps
- What is Chainlink?
- How Does the Invest in Chainlink Process Work?
- Why Should you Invest in Chainlink?
- How to Invest in Chainlink - Various Options Available
- How to Choose a Platform to Invest in Chainlink
- How to Invest in Chainlink Today - Step-by-Step Walkthrough
- How to Invest in Chainlink - The Bottom Line
How to Invest in Chainlink in 5 Easy Steps
These days, you can invest in Chainlink in under 10 minutes through an online crypto provider. The most important thing is that you tread carefully when choosing a broker.
Not to worry, you will find a dedicated section on this topic towards the end of this guide.
To invest in Chainlink, the first step is to open an accout with a regulated exchange, depost funds, select LINK from the platform list, and lastly confirm that the coins have added to your Wallet.
For now, to give you an idea of how easy the process is - below we outline how to invest in Chainlink in five simple steps:
Step 1: Create an investment account with a reliable online broker that allows you to invest in Chainlink on a commission-free basis - such as eToro.
Step 2: Instantly add funds to your account using a debit/credit card or an e-wallet.
Step 3: Find Chainlink from the list of supported digital currencies on the platform.
Step 4: Enter how much money you want to invest in Chainlink. eToro allows you to start investing in this digital token from just $25.
Step 5: Verify all the details you have entered, and confirm the order.
The LINK tokens you have just purchased will be readily available for you to withdraw.
Online broker eToro also offers in-built crypto storage facilities - avoiding the hassle of transferring your assets to an external digital wallet.
What is Chainlink?
In a nutshell, Chainlink is a network of oracles that connects smart contracts with the real world. To explain a little better - blockchains cannot access live data outside of its own network. That's where Chainlink comes into play.
It supplies reliable pieces of information such as weather reports, price action, or any other data to blockchains that need it.
The LINK token was designed as a means to reward participants on the network that can provide this data. As you can see, Chainlink plays a significant role in the upkeep and expansion of blockchain technology.
The Chainlink network was first developed in 2017 and has been successful so far in providing accurate external data for the efficient running of blockchain protocols.
Read Also: Is Chainlink a Good Investment?
How Does the Invest in Chainlink Process Work?
When thinking of how to invest in Chainlink, the most common strategy used is to purchase LINK tokens directly. In this method, you will be storing the digital asset in your private wallet, waiting for the price of the coin to increase before you cash out your investment.
The other way to access Chainlink is by trading CFDs (Contracts for Difference). These are derivative instruments that are offered by many regulated brokers.
When trading Chainlink CFDs, you won't be purchasing or owning any LINK tokens. Instead, these instruments will be tracking the price of the digital asset, so you will only be speculating on its future value.
No matter which approach you choose - you are hoping to see the value of Chainlink grow over time.
Put otherwise, you want to sell your LINK token holdings for a higher price than you bought them for, thus making a profit.
Let us offer you a practical example to show how to invest in Chainlink to make capital gains:
- Let's say you want to invest $1,000 in Chainlink.
- At the time you make the investment, a single LINK token is valued at $30.00.
- You decide to store Chainlink in your wallet for 12 months.
- After a year, Chainlink is worth $100 per coin.
- This shows a price increase of over 230%.
As per this example - in a single year, you make a profit of $2,300 on your $1,000 investment. In the cryptocurrency market, such significant returns in a short period of time are not an impossible feat.
In fact, since LINK tokens were launched in 2017, the coin has increased in value by over 18,000%. This means that investing in Chainlink offers the potential to target above-average market returns. Of course, this is on the proviso that you are able to correctly time the market.
Why Should you Invest in Chainlink?
With the demand for decentralized services continuing to surge, Chainlink is well-placed as the go-to oracle network for blockchain systems. The coin has since increased in value significantly to become one of the 12 largest cryptocurrencies in terms of market capitalization.
That said before you invest in Chainlink - you should be aware of the market forces that can determine its future value.
Peak Performance in 2021
Chainlink was first launched in September 2017, with an initial price of $0.16. By the end of 2020, the value of the coin had increased to $11.27. In a matter of three years, LINK returned nearly 7000% to its early investors.
Since the turn of 2021, Chainlink has remained in a bullish market - reaching an all-time high of $52.70 on 10th May 2021.
At the time of writing, on 27th May 2021 - a single LINK token is valued at $32.52.
Apart from some twists and turns along the way, this cryptocurrency has performed remarkably well over the past two years.
Don't Miss: Chainlink Price Predictions
Rise of Decentralized Networks
In 2020, we saw the decentralized finance sector position itself as one of the most lucrative industries. And Chainlink plays a pivotal role in this. Although the ecosystem is built on top of Ethereum, its design allows it to work across any blockchain that supports smart-contract functionality.
As we discussed earlier, Chainlink has been favoured by many decentralized networks as their oracle provider. The network has over 500 integrations - which includes 84 blockchains, 22 NFTs, and an impressive 213 DeFi projects, among others.
With every integration, the trading volume of the LINK token continues to increase. When Chainlink adds more partnerships to its network, it will enhance the utility of this digital asset exponentially.
This will, undeniably, reflect on the price of LINK tokens - which could drive prices up even higher.
Continuous Upgrades and Developer Activity
One of the main reasons why crypto projects fall behind is due to a lack of developer activity and upgrades to the product itself. However, Chainlink differs in this regard.
Being a decentralized oracle provider, developers will often use the services of Chainlink to power their own smart contracts.
According to its Whitepaper, Chainlink has an innovative architecture that offers both scalability and connectivity. This provides the possibility for the project to find even more room for positive changes and increased activity.
Moreover, the team behind Chainlink is also constantly working towards fine-tuning the network to cater to the evolving needs of DeFi projects. Over time, the ecosystem could adapt in order to keep up with the demands of blockchain technology.
If you are thinking of how to invest in Chainlink for the short term, you have plenty to benefit from the volatile nature of this cryptocurrency. In this method, you can use a 'day trading' or 'swing trading' strategy to capitalize on the price movements of the asset.
As we have covered earlier, you can engage in short term trading of Chainlink using CFDs. In doing so - you will be able to profit from bullish and bearish markets of the LINK token.
Let us offer you an example:
- If you think that the price of the LINK tokens will rise soon, you will use a buy order first.
- Once the value of the coin increases - you can use a sell order to cash out your profits. This is known as going long on cryptocurrencies.
- If you speculate that the value of LINK tokens is going to drop, you can open your position with a sell order first.
- If the price falls, you can place a buy order to purchase the coins at a lower price - making a profit in the process. This is known as going short on cryptocurrencies.
This way, instead of holding Chainlink in your wallet hoping for the price to rise - you will be able to benefit from the short-term volatility of the coin.
Moreover, rather than making one or two investments, you will be placing multiple trades while targeting modest profits.
However, the main issue in adopting this strategy is that you will need to be thorough with the ins and outs of the cryptocurrency markets before investing your money.
This can be a challenging undertaking for many cryptocurrency investors. On the other hand, by opting for a long-term investment strategy, there is no need to worry about the short-term price volatility of the LINK token.
Read Also: Could Chainlink Be A Millionaire-Maker Coin?
How to Invest in Chainlink - Various Options Available
As we mentioned earlier, we believe that the easiest way to invest in Chainlink is via an online regulated broker. However, considering the popularity of this digital asset, you will also find other mechanisms to purchase this cryptocurrency.
Let us offer you some insight into each of these options.
Today, investing in Chainlink is possible through almost all cryptocurrency exchanges. On these third-party platforms, you will be able to trade LINK tokens against any other cryptocurrency.
However, in the vast majority of cases, such cryptocurrency exchanges operate without a regulatory license. This is possible because they do not allow you to invest in Chainlink using fiat currency.
In other words, you will not be able to use fiat currency such as USD or EUR to buy Chainlink. Instead, you will have to fund your investment account with another cryptocurrency such as Bitcoin or Ethereum.
Here is how you can invest in Chainlink through a cryptocurrency exchange:
- You create an account at a cryptocurrency exchange that offers support for Chainlink.
- You fund your account with another cryptocurrency such as BTC, ETH, ETC, LTC, and so on.
- You exchange your cryptocurrency for LINK tokens.
- You will also have to pay a small commission - which will be anywhere in the range of 0.1% to 2%.
- When the purchase is complete, you can withdraw the LINK tokens to your private crypto wallet.
As you can see, this involves you having to procure another cryptocurrency before being able to exchange it for Chainlink. Furthermore, when you are looking to cash out your investment, you will have to repeat the entire process in reverse.
Therefore, this process can be a bit inconvenient for those who are new to the crypto investment space. Moreover, as these cryptocurrency exchanges are unregulated, you will be fully responsible for the safety of your assets.
This is why we prefer the security offered by regulated crypto brokers such as eToro.
If you are looking to invest in Chainlink through a regulated platform, then look no further than a licensed online crypto broker. This will not only allow you to fund your account with fiat currency, but you will also be able to benefit from fiat currency facilities.
For instance, regulated online broker eToro will allow you to deposit funds into your investment account through multiple convenient payment options - such as a debit card, credit card, and e-wallets like PayPal.
As a reputable social trading platform, eToro also holds licenses from the FCA, ASIC, and CySEC. US citizens are also protected through registration with FINRA and the SEC.
Moreover, eToro does not charge you any commission to invest in Chainlink.
There is also no deposit fee for funding your account in USD. You are only liable to pay a transaction fee of 0.5% when making a deposit in a currency other than USD, which is much more reasonable compared to the rates charged by competing platforms.
Above all, you will also have the convenience of storing your Chainlink tokens within eToro's in-built crypto wallet. As the platform is regulated, you will not have to worry about the safety of your LINK tokens either.
How to Choose a Platform to Invest in Chainlink
Once again, there are several online brokers that offer support for Chainlink. The question is, how can you find a platform that offers all the right features to help you achieve your financial goals?
To make this step easier for you, we have outlined some of the crucial factors that you need to take into account when choosing an online broker for your Chainlink investments.
Licensing and Reputation
By now, you are already aware of the importance of picking a licensed cryptocurrency broker. With that in mind, let us offer you some insight into what it means to be regulated in the digital currency space.
There are several financial authorities that issue licenses to online brokers. Some of the notable names include the FCA, ASIC, CySEC, SEC and FINRA. You will also find regulatory bodies in other jurisdictions across the world.
Being a regulated broker means that these platforms have to follow the guidelines set in place by the respective governing body. For instance, a licensed cryptocurrency platform should:
- Authenticate the identity of all registered users.
- Store client funds in segregated bank accounts.
- Submit order books for regular audit.
- Offer transparency and clearly display the risks associated with cryptocurrency investments and trading.
As you can see, with such rules in place - your investments will always be secure with a regulated broker.
Fees to Invest in Chainlink
Online brokers make money by charging you a variety of fees and commissions. This will vary from one platform to another, depending on the asset.
Most commonly, commissions are charged as a percentage against the size of your investment.
- Let's say that your online broker charges you a commission of 1.5% on Chainlink.
- Meaning - if you invest $1,000 into LINK tokens, you will have to pay $15 to the provider.
- If you decide to cash out your Chainlink investment when it increases in value to $3,000 - your commission will amount to $45 when closing the position.
As is obvious, you want to choose an online broker that offers lower commission rates. In fact, eToro allows you to invest in Chainlink without having to pay any commission at all.
Apart from commissions, you should also consider what other fees are involved in making a Chainlink investment. This is because many brokers charge you deposit and withdrawal fees to process transactions on the platform.
Minimum Chainlink Investment and Payments
On many online brokers, you will also come across a minimum amount required to start investing in Chainlink.
Preferably, you want to choose a platform that sets a low minimum investment. For instance, on eToro - you can start investing in Chainlink from as little as $25. This will allow you to invest in this cryptocurrency without risking large sums.
Additionally, some platforms might place a minimum deposit amount. This can be lower if you are funding your investment account with a debit or credit card rather than through a wire transfer.
depositing money through a wire transfer might involve a waiting period of up to 7 business days for the transaction to process. If you want to start investing right away - it might be better to stick to credit/debit card transactions or an e-wallet like PayPal.
Storage and Cashing Out
With a long-term investment plan, you will be storing your Chainlink tokens in a digital wallet.
That said, if your chosen broker comes integrated with a wallet, you do not have to go through the trouble of finding a suitable external provider for your digital assets.
For example, on eToro - the Chainlink tokens you purchase will be immediately added to the platform’s custodial wallet. This will save you from the inconvenience of having to withdraw your coins for safekeeping.
Moreover, as the platform is regulated, you can be sure that eToro abides by institutional-grade security measures to keep your assets safe.
How to Invest in Chainlink Today - Step-by-Step Walkthrough
Are you ready to invest in Chainlink?
To conclude our guide, we have also added a step-by-step walkthrough of how to invest in Chainlink using eToro from the comfort of your home.
Step 1: Open an Online Account
Visit the eToro website, and click on the 'Join Now' button on the top right corner of the homepage.
You will then be required to create your account by providing your email address and choosing a password. In addition, you will also need to fill in some personal information - such as your name, home address, date of birth, and phone number.
eToro will also ask you some questions to get an idea of your experience in the cryptocurrency investment space. This is to ensure that the trading features offered to you are intuitive to your needs.
Step 2: Upload Some ID
Being a regulated brokerage platform, eToro is also required to initiate a KYC process for all its customers. This is a simple and automated process that will take only a few minutes.
All you need to do is provide your valid photo-ID - like a copy of your passport or driver's license. You will also have to upload a copy of a recent utility bill or bank statement to confirm your address.
Although this step is necessary to access the full functionalities of eToro, you can start investing in Chainlink without having to complete this right now. You will only need to come back to it when you wish to withdraw your funds or make a deposit of more than $2,250.
Step 3: Make a Deposit
The next step is to fund your investment account. Depending on the payment method you choose, you might have to make a minimum deposit as specified by the platform.
Currently, eToro allows you to make payments using a debit card, credit card, bank transfer, or an e-wallet such as PayPal, Neteller, or Skrill.
Step 4: Search for Chainlink
You can locate Chainlink on eToro by merely searching for 'LINK'. Once the search result appears, click on the 'Trade' button to move on to the relevant investment page.
Step 5: Complete Chainlink Investment
At this stage, you can go ahead and specify how much you want to invest in Chainlink. As we mentioned, the minimum investment amount is set at $25.
When you have entered all the relevant information, check once more before you proceed. Finally, click on 'Open Trade' to make your commission-free investment in Chainlink.
Step 6: Cash Out Your Chainlink Investment
eToro allows you to trade Chainlink 24/7. Therefore, you can cash out your LINK tokens whenever you are ready.
All you have to do is to find Chainlink in your eToro portfolio and click on the 'Sell' button. The proceeds will be instantly updated on your account and will be readily available for withdrawal.
How to Invest in Chainlink - The Bottom Line
Currently, Chainlink is one of the hottest digital coins in the cryptocurrency market. The value of this token is expected to continue growing along with the rise of decentralized finance platforms.
Before you decide to invest in this asset, make sure that you perform lots of independent research.
Plus, when thinking of how to invest in Chainlink - the easiest and safest way to do so is using a regulated online broker like eToro. The platform is heavily regulated and allows you to buy Chainlink without having to pay any commission.
Above all, you can start investing in Chainlink from just $25. The entire process can be completed in less than 10 minutes, and you will be able to store your Chainlink tokens within the eToro custodial wallet at no extra cost.
eToro – Best Exchange to Buy Chainlink
eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
How much should I invest in Chainlink?
How much you should invest in Chainlink should be decided by your financial goals. Regardless, it is always suggested to limit your stake to an amount that you can afford to lose. If you are a newcomer to cryptocurrency investments, it will be best to stick to smaller sums. eToro makes it possible for you to start investing in Chainlink from just $25 upwards.
Is Chainlink a good investment?
Since the beginning of 2021, Chainlink tokens have increased by over 180% in value. However, it is impossible to predict which direction the coin will take in the future. As such, it is best to limit your investment to small sums.
How can I invest money in Chainlink?
You can choose a regulated online broker such as eToro to invest in Chainlink from the comfort of your home. The steps required include opening an account, verifying your identity, depositing funds, and purchasing LINK tokens.
Is it possible to invest $100 in Chainlink?
Yes, you will only have to choose an online broker with a minimum investment amount set at $100 or lower. On eToro, you can start investing in Chainlink from just $25.
How much money can I make on Chainlink?
The amount you can make will depend on how much you risk and to what extent Chainlink increases from the time you invest.