Why Polygon (POL) and Chainlink (LINK) Are the Undervalued Infrastructure Powerhouses in a Downturn Market

In the shadow of the 2025 bear market, where speculative altcoins have crumbled under macroeconomic pressures, two projects stand out for their resilience: Polygon (POL) and Chainlink (LINK). While their prices remain below previous highs, their fundamentals-rooted in infrastructure innovation, institutional adoption, and on-chain utility-suggest they are undervalued. This analysis explores how both projects are gaining traction during the downturn, despite broader market weakness, and why they represent strategic long-term investments.

Polygon (POL): Scaling Ethereum's Ecosystem Amid a Bear Market

Polygon's transition to Polygon 2.0 has positioned it as a critical layer-2 scaling solution for Ethereum. The Bhilai hard fork in Q3 2025 delivered 1,000 transactions per second (TPS), near-zero gas fees, and gasless transactions via EIP-7702, while the Heimdall v2 upgrade reduced block finality to 5 seconds, pushing the network toward 5,000+ TPS scalability. These upgrades directly address Ethereum's scalability challenges, attracting developers and users to the Polygon ecosystem.

On-chain activity reflects this momentum. Daily active addresses on Polygon PoS rose 10% quarter-over-quarter (QoQ) to 600,000, and Total Value Locked (TVL) in DeFi grew to $1.18 billion, driven by protocols like Spiko and QuickSwap. Stablecoin supply on Polygon PoS surged 23.3% QoQ to $2.98 billion, solidifying its dominance in USDC activity. Meanwhile, the MATIC-to-POL token migration reached 99% completion, signaling a smooth transition to Polygon 2.0 and reinforcing the network's long-term vision.

Institutional adoption further strengthens Polygon's case. Partnerships with regulated platforms like 21X and financial institutions in Europe and the Middle East highlight its growing appeal to traditional finance. The launch of Katana Network in September 2025, which attracted $600 million in liquidity, underscores Polygon's role in enabling cross-chain interoperability and decentralized finance (DeFi).

Despite a bearish market, Polygon's market capitalization surged 54% QoQ to $2.45 billion, outpacing broader crypto trends. Analysts argue that its price remains disconnected from fundamentals, with on-chain metrics like declining exchange reserves and rising active addresses indicating reduced selling pressure and renewed user engagement.

Chainlink (LINK): Bridging Traditional Finance and Blockchain

Chainlink's dominance in on-chain data infrastructure has made it indispensable for DeFi and institutional-grade applications. In Q3 2025, the project showcased its relevance at Sibos, Swift's premier financial services event, where it demonstrated partnerships with institutions like Deutsche Börse to bring real-time market data onchain via DataLink. This collaboration marked a milestone in tokenized asset workflows, enabling seamless integration of traditional financial data into blockchain ecosystems.

The Chainlink Digital Transfer Agent (DTA) standard, launched in Q3, further cemented its role in institutional adoption. UBS uMINT became the first smart contract to adopt DTA, allowing transfer agents to expand operations onchain while complying with regulatory frameworks. Additionally, Chainlink's partnership with GLEIF to leverage LEI records for blockchain-based identity solutions enhanced compliance and privacy for institutional users.

On-chain metrics highlight Chainlink's resilience. Despite a price drop to $12–$13 in Q4 2025, Total Value Secured (TVS) via Chainlink oracles reached $48.5 billion, underscoring its critical role in securing DeFi protocols. Daily trading volume surged 36.31% to $1.75 billion, driven by heightened social media engagement around technical breakdowns and price movements. Analysts note that while LINK remains in a descending channel, its fundamentals-such as TVS growth and institutional partnerships-position it for long-term value.

Fundamentals vs. Price: A Case for Undervaluation

Both projects face a stark disconnect between their market prices and underlying utility. Polygon's price of $0.24 in Q4 2025 remains far below its 2021 high of $2.92, despite a 3% Q3 TVL increase to $1.36 billion and expanding real-world applications like land title tokenization in India. Similarly, Chainlink's $12–$13 price range is approximately 70% below its 2021 peak, even as it secures billions in TVS and gains traction in institutional markets.

Expert analyses reinforce this narrative. Reports from Token Metrics and YouHodler highlight key metrics like NVT (Network Value to Transactions) and MVRV (Mean Value to Realized Value), which indicate undervaluation for both tokens. For example, Polygon's NFT trading activity surged 68.2% QoQ, driven by Courtyard's Pokémon NFTs, yet its price remains stagnant. Chainlink's technical roadmap, including the Chainlink Runtime Environment (CRE) and Cross-Chain Interoperability Protocol (CCIP), continues to attract developer attention, even as bears dominate short-term price action.

Strategic Positioning for Long-Term Growth

Polygon and Chainlink are not just surviving the bear market-they are adapting to it. Polygon's focus on zero-knowledge rollups and institutional-grade infrastructure aligns with Ethereum's long-term vision, while Chainlink's role in bridging traditional finance with blockchain ensures its relevance in a hybrid financial future.

For investors, the key takeaway is clear: infrastructure projects with real-world utility and institutional backing are better positioned to weather downturns. Both Polygon and Chainlink have demonstrated this resilience through technical upgrades, ecosystem growth, and strategic partnerships. As the market cycles, their fundamentals suggest they are poised for a re-rating when macro conditions improve.

Conclusion

In a bear market defined by volatility and uncertainty, Polygon and Chainlink stand out as undervalued infrastructure powerhouses. Their ability to drive scalability, interoperability, and institutional adoption-despite broader crypto weakness-highlights their strategic importance. For long-term investors, these projects represent compelling opportunities to bet on the next phase of blockchain innovation.