1 of the Best Cryptocurrencies to Buy Right Now

There's an argument that the best way to profit during a gold rush is not to sprint into the mine but rather to sell shovels to miners by the trainload. As cryptocurrency gets institutionalized, some of the "shovels" are data sources, which are exactly what Chainlink (CRYPTO: LINK) offers.

And that's what makes it one of the best cryptocurrencies to buy right now, so let's take a closer look at why it's positioned to succeed.

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This coin has a great business model

At the moment, financial institutions are wiring their traditional assets into blockchains for management. To do that, they need financial, economic, and market data, as well as a safe mechanism for passing messages across chains.

As an oracle coin, Chainlink's oracle network and cross-chain interoperability protocol (CCIP) are built for that job, and coinholders capture value from usage, as users must pay the network for its data oracle services on the chain where they're doing business. Most of the time that payment is denominated in the Link token, which forces users to buy it beforehand, though in some cases it's also possible to pay with a chain's native gas fee token; the fees accrue to the Chainlink network either way. So every time there's an on-chain application that taps Chainlink's system for data, or relies on its system for cross-chain messaging, it creates some value for Link holders.

The chain is also a critical tool for decentralized finance (DeFi) and pretty much every other on-chain financial application, too. Smart contracts cannot examine the real world directly, they need data oracles bring it to them and package the information in a way that's both machine-readable and trustworthy from the perspective of everyone who might need to interact with it. Chainlink already secures $51.8 billion in value across the DeFi segment and adjacent applications, making it the dominant oracle by total value secured (TVS), and demonstrating that it fulfills both of those criteria.

As a result of these capabilities and its reliability, the institutional use cases for this coin are no longer hypothetical. Participants like JPMorgan Chase are already using Chainlink for their cross-chain operational needs. Similarly, asset manager WisdomTree said it is bringing on-chain data for a tokenized real-world asset (RWA) private credit fund using Chainlink, with plans to extend to additional tokenized funds.

If the RWA tokenization trend keeps scaling up rapidly, as it likely will, the tolls collected by Chainlink will go up with it. Even if the market changes a lot, players will still need data to compete, which also makes the coin's position fairly secure.

Compliance is an edge, too

Tokenized finance will not live on a single chain. That means institutions need a secure, regulatory-compliant way to move data and value across public and private networks. Chainlink's cross-chain interoperability protocol, as mentioned previously, is designed for cross-chain token transfers plus messaging, with built-in regulatory controls. And compliance tooling is another reason why this coin is significantly ahead of the competition.

Separately, now's a pretty good time to consider buying Chainlink, assuming you're willing to hold it for a few years. Roughly a month after the Oct. 10 crypto flash crash, the coin is still down by 31%, so it's a good candidate for buying the dip.

That doesn't mean it's a riskless purchase, of course. Competition among data oracles as well as crypto bridges could siphon its fee base, a stall in RWA tokenization could slow fee growth, and regulatory changes, which are highly likely at the moment, could potentially delay enterprise deployments. It might also take longer for protocol revenue or usage to be reflected in the token's price than investors expect.

But, for long-term investors building positions over quarters, the investment thesis is pretty compelling. If blockchains become rails for real-world finance, offering neutral data plus interoperability in a package that banks can adopt without fear will be a valuable service that's ultimately paid for at scale. And that's why it's worth buying Chainlink.

JPMorgan Chase is an advertising partner of Motley Fool Money. Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chainlink and JPMorgan Chase. The Motley Fool has a disclosure policy.