Investment company Bitwise submitted a preliminary prospectus to the SEC for the launch of a spot ETF on Chainlink. This move expands the range of potential altcoin funds and coincided with the recovery of the token's price after the market correction.
ETF on Chainlink: application details
According to documents, the product will store tokens through the custodial service Coinbase Custody. The ETF assumes cash settlements, but in the event of liquidation, compensation may be in either cash or assets.
In practice, ETFs in the U.S. currently do not use 'in-kind' settlements, as investors prefer to avoid complexities related to storing cryptocurrencies and managing wallets.
Previously, the SEC had already postponed consideration of other products, including the WisdomTree ETF application, which was rescheduled for October. Despite the regulator's caution, management companies continue to actively expand the list of tokens for which applications are submitted.
The role of Chainlink in American indices
Recently, LINK was included in the 'Made in USA' selection by Canary Capital, where the token ranked among the top five digital assets by market capitalization. This underscores its position as one of the main candidates for institutional recognition.
Against the backdrop of the ETF application news, the LINK price stabilized at $23.54, partially offsetting losses after a broad market correction.
Current infrastructure of Chainlink
So far, the only public fund on LINK remains the Grayscale Chainlink Trust, with assets estimated at approximately $29 million. Each share corresponds to 0.89 LINK, however, trading in the trust is accompanied by low volumes and frequent deviations from the actual market value. The launch of an ETF could solve the liquidity issue and make access to LINK more transparent.
The oracle network and fundamental value of LINK
Despite a relatively modest number of active wallets (about 10,000 per day), Chainlink plays a key role in the DeFi ecosystem.
The project's oracles provide data transmission for more than 458 protocols.
The total amount of secured assets exceeds $59.5 billion.
Chainlink's market share in oracles is over 61%.
These indicators make LINK one of the most sought-after assets for staking and long-term holding. Moreover, the supply of tokens on exchanges is gradually decreasing, creating conditions for a market shortage.
Trader activity and whale positions
The growing interest in the token is confirmed by derivatives data: open interest recently surged to $897 million before correcting to $710 million.
According to the decentralized exchange Hyperliquid, more than 86% of large players hold long positions in LINK. This reflects bullish expectations for the asset and increases the likelihood of growth after the correction is completed.
However, such a concentration of longs also carries risk: in the event of a sharp decline, cascading liquidations may occur, exacerbating volatility.
What's next?
Bitwise's ETF application for Chainlink shows that the market is moving beyond Bitcoin and Ethereum, forming institutional demand for other infrastructure tokens.
If the SEC gives the 'green light', LINK will receive a powerful boost: the product will provide transparent access for large investors and increase the token's liquidity. Against the backdrop of declining supply on exchanges and whale activity, this could drive new growth.
