What do you get when you combine cryptocurrency and artificial intelligence?
Bitcoin, seemingly sensible, coded in the style of a Japanese haiku? Alas, billions of dollars can be traded in a new class of crypto tokens.
Machine geeks taking the tech world by storm amid the launch of ChatGPT and Bard have reached the Cryptoverse with a surge of interest in tokens tied to AI blockchain projects.
Average daily trading volume for the biggest coins, including SingularityNET, Fetch.AI and Render, surpassed $1 billion in early February, hitting a two-year high, according to data firm Kaiko.
AI-linked blockchain products range from payments, trading models, machine-generated non-fungible tokens, and blockchain-based marketplaces for AI applications where users pay developers in cryptocurrencies. service is covered.
Eric Chen, CEO of Injective Labs, a decentralized financial platform, said: We are all too familiar with hype, speculation and excessive expectations. “
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Investment returns have been strong so far. The CoinDesk Indices Computing Index, which includes AI-linked tokens, surged 60% in February this year due to a spike in OpenAI’s ChatGPT usage.
Although trading volumes declined in March, they remain above the long-term average for the cryptocurrency sector, with many tokens significantly outperforming Bitcoin, with year-to-date returns ranging from 150% to 780%, Kaiko said. analyst Dessislava Aubert said.
Investments in this space are also on the rise, with CryptoGPT, which lets users sell their data to AI companies, raising $10 million in funding this month.
However, despite high returns this year, the AI crypto sector remains a niche, with CoinGecko’s total market capitalization of AI-classified coins at $2.7 billion, dwarfing the total crypto market of $1.2 trillion. I’m here.
Some projects may be riding the AI wave without a sustainable plan. Because the field is relatively new, there are likely to be few winners, market players warn.
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“AI and blockchain have some synergies, but I don’t know how many current projects are taking advantage of them,” said Ryan Rasmussen, research analyst at Bitwise. said.
“You have to look under the hood.”
Crypto AI: Big Expectations or Hype?
The potential of AI-linked cryptocurrency apps allows investors to sort out the hype, solve some problems, attract more users to blockchain products, and ensure solid returns. I hope to be able to identify the
VanEck Portfolio Manager Pranav Kanade said:
He divides the world of AI cryptography into products that are likely to be adopted in the short term and long-term bets that solve pressing problems.
In the short term, the rise of distributed computing networks will allow users with unused graphics processing unit (GPU) capacity to provide others with usable capacity for resource-intensive AI learning models. Kanade said it could be.
Similarly, some industry watchers see blockchain-based marketplaces as offering an easy way for system developers to gain market share and smaller users to access new AI technologies.
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SingularityNET is one of the largest such marketplaces, with its token market cap jumping from $52 million to over $414 million this year.
Other potential long-term use cases include using blockchain as evidence to distinguish between AI and human-generated content.
Todd Gross, head of index research at CoinDesk Indices, says many investors are aware it could be a long game, but some runaway successes make up for the risks. said he wanted to
“You’re investing in projects, but many will never see the light of day,” he added. “We just need a few names that do very well.”
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