In terms of price, AI coins have performed exceptionally well this week. But price action seems more like the crypto proxy of the AI bubble. The rally comes as a JP Morgan report that says traders are turning their attention to AI and moving away from Blockchain.
“AI coins are affected by hype and investor sentiment”
Blockchain and artificial intelligence researcher Vasco Lopes at NOVA tech school near Lisbon, Portugal, comments on artificial intelligence coins that have become the trend of recent times:
The rise in the price of AI-related cryptocurrencies can undoubtedly result from real and tangible developments in the AI and Blockchain industries. However, AI coins are also being hit by hype and investor sentiment, as the growing popularity of AI and AI-related products, such as the release of OpenAI’s ChatGPT language model, has generated excitement and interest in the AI industry.
“The real benefit has not yet been tested”
AI cryptos reached a market cap of $4.27 billion, up 56% from last week. While this is only 0.4% of the $1.07 trillion cryptocurrency market, the rapid rise has drawn attention to the role of artificial intelligence in cryptocurrencies. Noelle Acheson, former head of research at Genesis Trading and CoinDesk, said:
AI is still a very new field, definitions are still being created, and the true utility of tokens in AI applications has yet to be tested. The exaggeration feels like it has outstripped its true growth potential.
AI coins post triple-digit gains
Juan Leon, a crypto researcher at Bitwise Investments, says that crypto markets are often powered by current trends. Without proper investment and development on projects, AI coins risk becoming another fad in an industry fueled by hyperbole.
And there’s the hype. Crypto AIs are led by The Graph’s GRT token, up 87% over the past seven days and 150% last month. Graph Network makes it easy to query Blockchain data without going through a server. Creating a marketplace for AI programs, Singularity NET’s token, AGIX, is up 116% in seven days and a staggering 327% in the past month. The three top-performing AI coins are rounded off by Fetch’s FET, up 57% over the last seven days and 140% over the past month. Fetch aims to connect different types of blockchain and artificial intelligence technologies.
“The frenzy is reminiscent of the flood of ICOs”
The hype has been largely driven by the explosive growth of ChatGPT, an AI-powered chatbot, and Dall-E, a tool that generates images from word-based descriptions, both created by OpenAI. “Blockchain AI projects have value, but technologies like ChatGPT definitely create a sense of interest and FOMO (fear of missing out) about anything AI-related,” Lopes says. The frenzy is reminiscent of the flood of initial cryptocurrency offerings (ICOs) in the crypto market in the middle of the last decade. In this context, Lopes comments:
This AI-crypto cycle reminds me a bit of the ICO cycle. Because at that time, a Blockchain-based token suddenly appeared for every use case you could think of. Now we’re starting to see AI-based tokens pop up on the left and right.
“Movements are an extension of traders looking for hot narratives!”
cryptocoin.comFueling the fire, TronDAO announced on Wednesday the creation of a $100 million AI development fund dedicated to ‘promoting the blending of AI technology with Blockchain technology’. TronDAO oversees decisions for Tron Blockchain, and its new fund will focus on payment services, Blockchain oracles, and artificial intelligence used for content creation. According to Nomics, Tron Blockchain’s management token, TRX, has dropped nearly 3% after the news today.
According to a JP Morgan report, Wall Street traders have not been able to escape the temptation of artificial intelligence. Artificial intelligence has surpassed blockchain as the technology expected to be the most effective in the next three years. The study found that 53% of traders surveyed said artificial intelligence and machine learning would be the most effective technology for them, up from 25% last year. Connected with AI as the most effective technology in 2022, Blockchain garnered only 12% of the votes this year.
“The moves feel like an extension of traders looking for hot narratives regardless of their real value,” adds Noelle Acheson. Analysts also point to an overall investment risk among crypto investors, especially given the favorable macroeconomic conditions fueled by the decline in inflation and slowing US interest rate increases. These price movements “tend to be a sign that the general fear that dominated the market at the end of last year has finally dissipated,” Acheson says.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.