GLNK as a Picks-and-Shovels Play in the Tokenization Era

The launch of Grayscale's Chainlink ETF (GLNK) in December 2025 marks a pivotal moment in the evolution of blockchain infrastructure investment. By offering institutional and retail investors regulated access to the LINK token through traditional brokerage accounts, GLNK has positioned itself as a "picks-and-shovels" play in the tokenization era-a sector poised to redefine financial infrastructure. However, the question remains: does Chainlink's infrastructure adoption justify its valuation in a non-yielding, fee-encumbered ETF structure? To answer this, we must dissect the interplay between institutional demand for regulated blockchain exposure, the velocity problem of utility tokens, and GLNK's positioning relative to broader market dynamics.

Infrastructure Adoption: A Foundation for Growth

Chainlink's oracle infrastructure has become a critical backbone for decentralized finance (DeFi) and tokenized assets. In 2025, its network processed over $27 trillion in transaction value, demonstrating resilience even during major events like AWS outages. This reliability has attracted major institutions, including JPMorgan and Aave's Horizon, which leverage Chainlink's Cross-Chain Interoperability Protocol (CCIP) to connect tokenized assets across private and public blockchains. By Q3 2025, Chainlink had surpassed $100 billion in Total Value Secured (TVS) and held approximately 70% of the oracle services market. These metrics underscore its role as a foundational layer in the transition from traditional finance (TradFi) to onchain finance.

Institutional adoption has further accelerated through initiatives like the Corporate Actions Industry Initiative, which involves 24 major financial institutions, including UBS and Deutsche Börse, to streamline corporate actions using oracles and AI according to Chainlink's Q3 2025 review. Chainlink's Digital Transfer Agent (DTA) standard, adopted by UBS uMINT, enables transfer agents to operate onchain while adhering to regulatory frameworks as detailed in Chainlink's Q3 report. Such partnerships highlight Chainlink's ability to bridge the gap between blockchain innovation and enterprise-grade compliance.

The Velocity Problem and ETF Structure

Despite robust infrastructure adoption, the LINK token faces a well-documented "velocity problem." Analysts caution that large institutions may bypass direct LINK token demand by using fiat or rapidly cycling the token, weakening the economic link between usage and token value. This concern is compounded by the rise of private banking systems that could develop in-house oracle solutions, reducing reliance on public networks like Chainlink.

GLNK's ETF structure aims to mitigate this issue by offering institutional investors a regulated, custody-friendly alternative. However, the ETF lacks staking rewards and faces yield tradeoffs compared to alternatives like Bitcoin ETFs or yield-bearing stablecoins as highlighted in Chainlink analysis. While GLNK initially operated with a 0% fee structure, it is expected to shift to a 0.35% management fee once assets reach $1 billion. This pricing strategy positions GLNK competitively against legacy crypto trusts but raises questions about its ability to attract capital in a market where yield-bearing products dominate.

Market Dynamics: Bitcoin ETF Outflows and London's Reopening

The broader crypto market has seen divergent trends in 2025. GLNK attracted $41 million in net inflows on its debut, while BlackRock's iShares Bitcoin Trust faced a prolonged outflow streak, losing over $2.7 billion in five weeks as of November 2025. This contrast highlights fragmented investor behavior, with institutional demand shifting toward regulated altcoin exposure despite Bitcoin's traditional dominance.

Meanwhile, the UK's Financial Conduct Authority lifted a four-year retail ban on crypto ETNs, enabling products like BlackRock's Bitcoin ETP and 21Shares' offerings to attract 30% of UK adults as potential investors. This development has created a competitive fee environment, with GLNK likely to benefit from increased retail and institutional participation as regulated products gain traction.

Valuation Benchmarks and the Velocity of Asset Dynamics

Non-yielding crypto ETFs like GLNK face unique valuation challenges compared to yield-bearing alternatives. For instance, yield-bearing stablecoins such as USDY from Ondo Finance) offer returns derived from U.S. Treasury bills, functioning similarly to tokenized money market funds. In contrast, GLNK's valuation hinges on the appreciation of LINK, which must overcome the velocity problem to justify its price.

However, velocity itself can be a double-edged sword. Digital Asset Treasuries have demonstrated how rapid asset accumulation and leverage of market net asset value (mNAV) premiums can amplify token valuations beyond intrinsic price appreciation. While GLNK lacks such mechanisms, its role in tokenized finance-where institutions increasingly tokenize assets and streamline processes-positions it as a long-term beneficiary of the sector's growth.

Conclusion: Justifying the Valuation

GLNK's valuation in a non-yielding ETF structure ultimately depends on whether Chainlink's infrastructure adoption translates into sustained demand for the LINK token. The project's 70% oracle market share, as reported in Q3 2025, $100 billion TVS milestone, and strategic partnerships with financial giants like UBS and Deutsche Börse provide a strong foundation. However, the velocity problem and lack of yield-bearing features pose risks that investors must weigh against the potential for institutional adoption to drive token value.

As the tokenization era gains momentum, GLNK's role as a picks-and-shovels play-enabling the infrastructure for onchain finance-could justify its valuation if the broader market continues to prioritize regulated access to blockchain innovation. Yet, in a landscape where yield-bearing alternatives and Bitcoin ETFs dominate, GLNK's success will hinge on its ability to align infrastructure growth with token economics that resonate with both institutional and retail investors.