- Cryptocurrencies with AI foundations are in the spotlight.
- Total market cap could head toward $100 billion if 2024 repeats 2023’s performance.
The convergence of artificial intelligence [AI] and blockchain could be a powerful force to keep an eye on this bull cycle. But don’t just take my word for it, because I’m just a human being with an opinion.
However, I’m not the only one intrigued by this combination.
Vitalik Buterin, the co-founder of Ethereum [ETH] seems to share a similar opinion. But before I go any further, know that everything about this article is not streamlined on price predictions.
Instead, you may find facts and figures that focus on the development within the AI space.
If you’re curious enough to keep reading until the end, you might learn a thing or two that explains how AI could impact the future crypto economy. But for now, back to Buterin.
Ethereum holds AI in high regard
On February 19, Buterin posted that he was excited about AI applications. However, he limited his interest to the verification of codes and bugs on the Ethereum blockchain.
According to Buterin, some of these applications can “significantly change the game.”
Source:
Before Buterin’s 2024 opinion, AI tokens outperformed many other categories in the market. A perfect example is Fetch.ai [FET].
Interestingly, FET on Ethereum was developed as an open, permissionless, decentralized machine learning network. At the time of writing, the price of FET has risen 109.78% over the past 365 days.
In addition to the hype surrounding AI, there have been other factors that have fueled the story. An undeniable fact was the incredible adoption of ChatGPT in 2023, Open AI’s viral crypto chatbot.
The increasing acceptance of the instrument had initially caused some controversy, with some saying it was just a bubble that would go out.
But Dan Ives, a popular technology analyst, had an opposing view. In June 2023 Ives told CNBC, which could unfortunately bite the fingers of bears who are skeptical about the sector.
He also called AI the fourth industrial revolution, noting:
“I think these are really transformative changes in technology that I think will change the technology space over the next 20 to 30 years.”
TAO, INJ and others may not stop running
Going by Ives’ views on AI, we can assume that AI tokens could take a big hit during this bull cycle. AMBCrypto checked the odds by looking at Santiment’s on-chain screener.
According to our results from the Tree mapAI projects including Bittensor [TAO]The graph [GRT]and injective [INJ] have seen their prices rise.
For TAO, the performance was something the crypto market hasn’t seen in a long time. At the time of writing, TAO changed hands for $641.53. This value represented an increase of 508,010% over the past year.
INJ, on the other hand, is up 72.25% over the same period.
Source: Santiment
So it wasn’t surprising that social volume around these tokens jumped. Social volume measures the speed at which the market searches for a cryptocurrency.
If the value increases, it means that interest in the project is high, and this can lead to higher prices.
But if social volume drops, it indicates the broader market is overlooking the project.
At the same time, keep in mind that if social volume predicts a price increase, there will come a time when momentum will cool down.
So if you’re thinking “only” about all AI tokens, you might be wrong.
Worldcoin joins the party
Despite the possibility of retracement, it doesn’t seem like the AI story is going away anytime soon. But this time it’s not just about ChatGPT.
Recently, OpenAI, led by Sam Altman, issued a new AI tool called Sora. Unlike ChatGPT, Sora is a text-to-video tool.
Since the announcement on February 15, the prices of the above-mentioned tokens have skyrocketed.
In addition to those mentioned, AMBCrypto reported that Worldcoin [WLD]also co-founded by Altman, reached a new All-Time High (ATH).
Should Sora experience the kind of adoption that ChatGPT did, WLD, among other AI tokens, could cross new ATHs. But if Sora doesn’t reach those levels, the peaks of these cryptocurrencies might not be as high.
AMBCrypto spoke with Eric Bravick about the potential of AI in the crypto space. Bravick is head of artificial intelligence at CryptoOracle Collective.
According to him, AI’s high level of usability could make the tokens one of the best-performing assets of this cycle. He told us that,
“AI will remain relevant in the crypto space due to its high utility and potential for hype cycle sustainability, and crypto’s need for something new to build on will drive AI adoption.”
However, our conversation with Cuautemoc Weber was somewhat different. Weber is the CEO and co-founder of Gateway.fm, a provider of decentralized blockchain infrastructure nodes.
According to him, it may be difficult to predict the long-term potential, but
“There has been a notable increase in traction for AI-related tokens recently, with Worldcoin’s WLD token and Ocean Protocol’s OCEAN token showing strong market performance. Whether this momentum will continue in the long term is difficult to predict, but the integration of AI within the crypto ecosystem holds tremendous promise.”
GPUs prepare new ATHs for AI tokens
Another factor driving the rise of AI-themed cryptocurrencies is the demand for Graphics Processing Units (GPUs). GPUs are an essential part of a modern artificial intelligence infrastructure.
Recently they have been specifically developed and optimized for deep learning.
We also had the opportunity to speak with Christopher Alexander. Alexander is Chief Analytics Officer at Pioneer Development Group.
During a quick chat with him, we asked how long he thinks AI will remain relevant to the crypto ecosystem. This is what he had to say,
“The decentralized computing power of blockchain means that AI crypto efforts may soon be able to compete with some of the most powerful supercomputers in the world, at a fraction of the operating costs. I think blockchain has enormous potential to develop and operate some of the most effective AI tools and servers ever.”
Interestingly enough, this is where tokens like Render [RNDR] enter. RNDR is the ERC-20 utility token of the Render Network. For those unfamiliar, Render is a distributed GPU rendering network built on Ethereum.
Over the past 365 days, the price of RNDR has increased by 236.54%. When AMBCrypto checked Considering the total number of RNDR holders, we noticed that the number had grown.
For example, the number of holders as of August 2023 was just under 40,000. But at the time of writing the number had risen to 65,600. It was a similar situation at FET, whose number of holders rose to 61,100.
Source: Santiment
Eyes on mid- to low-cap as demand rises
The increasing number of holders was evidence that the broader market was latching on to the prospect that AI tokens could flourish if the bull market takes off.
At the time of writing, the total market capitalization for the AI category in the market was $10.28 billion.
However, macroeconomic factors such as the AI semiconductor market could increase its value. For example, a recent article from NIKKEI Asia noted that global demand for semiconductors will increase by the second quarter of 2024.
Business intelligence platform Statista also said that:
“The AI semiconductor market is expected to rise to $119.4 billion by 2027, accounting for nearly 20% of the global semiconductor market.”
If this is the case, the market capitalization of AI-themed cryptocurrencies would most likely increase. However, it remains uncertain whether market cap will cross the $100 billion mark this cycle.
To achieve that, the average values of tokens in the category would need to increase by 10x.
While this is not impossible, it seems too lofty a goal. Anyway, there seem to be mid to low cap cryptocurrencies that can reach 5x or 10x in value. This projection was due to the surrounding story.
Two important examples are PAAL AI [PAAL] and sleepless AI [AI].
PAAL is an AI token built on Ethereum. At the time of writing, PAAL’s market capitalization was $285.11 million. Should the price of ETH rise amid the AI hype, PAAL could see a tremendous rise.
Sleepless AI, on the other hand, is supported by the gaming story. It was launched on the Binance Launchpad and had a market capitalization of $226.4 million at the time of writing the report.
Realistic or not, here is FET’s market cap in terms of INJ
Additionally, our conversation with Bravick also led to his thoughts on long-term relevance. When Bravick was asked if the AI and crypto marriage would stick around for a while, he said:
“I expect we will see a wave of token launches related to AI over the next decade, with potential use cases involving privacy advocates and AI-powered systems. AI will also transform UX in crypto, eliminating engineering hours and making development more accessible.”