Why does Matt Hougan believe that Chainlink (LINK) is seriously undervalued

After Bitwise launched an ETP product tracking Chainlink, Matt Hougan believes that most investors still do not fully understand the true role of this asset, even though Chainlink maintains a dominant position in core areas such as stablecoins, DeFi, tokenization, and infrastructure for institutional crypto.

Matt Hougan, Chief Investment Officer of crypto asset management firm Bitwise, states that Chainlink (LINK) is one of the most misunderstood crypto assets, yet it is also one of the most important and may be undervalued.

This statement was made just a few days after Bitwise quietly launched a new Chainlink exchange-traded product (ETP) on the market.

From Stablecoins to DeFi

In the latest note, Hougan mentions that the Chainlink ETP was launched with modest trading volume and low spread, but did not generate the same strong effect as previous Bitcoin ETPs. He attributes this mainly to investors not fully grasping the role of LINK within the crypto ecosystem.

According to Hougan, Chainlink is currently the 11th largest crypto asset by market capitalization, approximately $10 billion, but it is a complex project that cannot be easily summarized with simple stories like Bitcoin being “digital gold” or Ethereum as a smart contract platform.

He emphasizes that calling Chainlink merely an “oracle data” project underestimates its actual functions and can cause misunderstandings. In fact, oracles do more than just provide external data such as asset prices or real-world events to blockchains; Chainlink has expanded far beyond this definition.

Hougan describes Chainlink as a high-growth software platform focused on solving a core blockchain problem: the isolation between networks and with the real world. He states that Chainlink holds an overwhelming market share, ranging from about 50% to nearly all, in many critical infrastructure services.

According to Bitwise, many of the fastest-growing crypto sectors with high institutional participation are deeply dependent on Chainlink technology. Stablecoins use Chainlink for price feeds, cross-chain transfer capabilities, and proof-of-reserves mechanisms. Tokenization initiatives rely on Chainlink for valuation, asset services, and compliance-related processes. Meanwhile, DeFi and prediction markets also depend on Chainlink infrastructure to operate efficiently.

Hougan also cites that Chainlink has been adopted by numerous leading organizations and financial institutions worldwide such as DTCC, SWIFT, JPMorgan, BNP Paribas, Visa, Mastercard, Euroclear, Fidelity, Franklin Templeton, FTSE Russell, Coinbase, Aave, Deutsche Börse, and Polymarket.

He expects the demand for Chainlink ETP products from institutional entities to continue increasing, alongside the trend of bringing more financial assets onto the blockchain.

LINK Price Movement

In terms of price, LINK has experienced significant volatility over the past month. After a sideways period at the end of December, the token surged in early January and briefly surpassed $14 before the rally weakened. Subsequently, LINK corrected and retreated to around $12.3 in recent sessions.

Meanwhile, on-chain analytics firm Santiment reports that the largest Chainlink holders are returning to accumulation as the price drops below $13. Data shows that the top 100 LINK wallets increased their holdings during the recent correction, contrary to retail investors’ selling behavior driven by impatience and FUD.

Santiment notes this as a common phenomenon during weakening markets, where large investors take advantage of dips to accumulate assets, betting on a future price recovery.