The early success of ChatGPT sparked a buying spree for AI coins, some of which rose 20% or more in a single day. According to crypto expert Dominic Basulto, this buying spree is reminiscent of the metaverse spree in 2021, where metaverse tokens skyrocketed according to trillion-dollar growth projections. The expert dives into the world of artificial intelligence crypto.
What you need to know before buying AI coins
cryptocoin.comAs you follow, in early 2023 artificial intelligence (AI) tokens remain one of the hottest segments of the crypto market. Some of the most popular AI coins like Fetch.AI (FET) and SingularityNET (AGIX) are reporting 20% gains in a single day. Traded for pennies only at the beginning of the year, AGIX has increased by a mind-blowing 650% in the last 30 days and is now among the top 100 cryptocurrencies in the world.
All of this has been made possible by the phenomenal success of ChatGPT, OpenAI’s AI-powered chatbot that has taken the internet by storm in recent months. ChatGPT and pretty much everything related to AI is generating buzz these days. Which makes us wonder if these AI coins are really the once-in-a-decade investment opportunities.
What do artificial intelligence coins mean?
The easiest way to think of AI tokens is that they are digital tokens that give users access to powerful AI technology. In most cases, you use these tokens as currency to pay for AI products and services located on a Blockchain. If you think about it from ChatGPT’s perspective, it’s like paying ChatGPT a (currently free) crypto token to get their response. The more detailed the answer, the more likely you are willing to pay.
For example, Fetch.AI powers a network of autonomous AI agents that can perform tasks with minimal human intervention. The vision here is big: It goes far beyond answering a few online questions like ChatGPT. According to Fetch.AI, new AI tools and services available through an app can enable businesses to reorganize their supply chains, control homeowners’ smart homes, and enable major logistics players to optimize their transportation networks. All of this will help power the new AI economy.
SingularityNET is a blockchain-based artificial intelligence marketplace. Basically, instead of using an online marketplace to find human freelance talents, you use an online marketplace to find AI bots. Considering all the ways businesses and individuals use freelancers and remote talent to get things done, the number of uses here is staggering. From this perspective, you can see why these artificial coins are exploding in value. There is clearly a huge market opportunity here.
Is AI becoming the new metaverse?
My concern is that AI is becoming the new metaverse for crypto investors. Remember how investors went crazy for metaverse coins in 2021? There was a rush to buy metaverse tokens like Decentraland (MANA) and The Sandbox (SAND). Its prices skyrocketed before returning to Earth in 2022. This can happen again, this time with AI coins. The ChatGPT craze could get so intense that even if a token had the word ‘AI’ in its name, investors might be tempted to buy it. This could lead to a huge wave of speculative buying followed by a drop in prices.
Therefore, it is important for investors to be able to assess the long-term value of different AI tokens in the crypto market. The starting point is to be able to describe these tokens in non-technological terms and then find comparable public companies. You can also browse the best machine learning stocks and see how they are performing. For example, some analysts have dubbed SingularityNET ‘Fiverr for AI (FVRR)’. Since Fiverr is a public company, you can use it as a building block to value SingularityNET. If investors think a market for human freelance talent is worth $1.65 billion, how much should a market for AI talent be worth?
What should investors do?
With that in mind, here’s a big takeaway: Don’t buy a token just because it has the acronym AI in it. Understand its long-term value and see if it’s right for you. You don’t need to be an expert in machine learning or neural networks, but you should understand why Blockchain technology is so suitable for AI technology. From there, you will be much better equipped to value the long-term potential of different AI tokens.
In the long run, I’m very optimistic about AI. Based on my own limited interactions with ChatGPT, I am amazed at what it can currently accomplish. However, at the moment, I cannot recommend any AI tokens as the market is very foamy and speculative. Fetch.AI and SingularityNET seem to have a first mover advantage here. But we said this for Decentraland and The Sandbox as well. So be careful.
The opinions and recommendations in the article belong to the experts and are definitely not investment advice.
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