Understanding tokenomics is key to gaining an edge when investing in cryptocurrency. One of the important indicators is supply inflation, which has a significant impact on the cost of investments. Chainlink (LINK) is experiencing significant inflation compared to other cryptocurrencies. Using leading indices and demand as indicators, experts predict the behavior of the trading price #LINK if the token reaches a record market capitalization.
It is important to note that inflation assets like LINK require increased demand to maintain their value. Supply and demand dynamics play a crucial role in cryptocurrency price fluctuations. For example, on May 9, 2021, LINK reached an all-time high price of $52.88, bringing #Chainlink 's capitalization to $22.648 billion with approximately 428,290 tokens in circulation.
However, a few days ago, Chainlink's market capitalization exceeded this figure, trading at a lower price. A record high market capitalization was achieved on May 5, 2021, and then no more than $47 was given for one token. Let's look at Chainlink supply inflation and its economic implications. As of this writing, there are 556.849 million LINKs in circulation. Thus, over two and a half years, supply inflation amounted to 128.559 million LINK (23%), or about 12% per year.
In the event that the leading oracle network reaches previous speculative demand, LINK will trade at a proportionately lower price than its all-time high. Considering the supply of the token at the time of December 5, at maximum capitalization, the price of Chainlink would be $40.94 per token. Interestingly, this is $11.94 (22.57%) less than the highest asset price achieved in 2021 at an even lower market capitalization. However, this likely scenario is a whopping 162% higher than the current price of $15.62. It is important to understand that for this forecast to materialize, the demand for Chainlink must be the same as in 2021. Accordingly, there are no guarantees that the situation will repeat itself.
