Key Points
Artificial Intelligence (AI) based cryptocurrencies are seeing a surge in interest. If the performance of 2023 continues into 2024, the total market cap could approach $100 billion.
The combination of AI and blockchain technology is a powerful synergy to watch in this bull cycle. This isn’t just one person’s opinion, but a widely shared sentiment.
Ethereum [ETH] co-founder, Vitalik Buterin, also seems to be interested in this combination. However, this article isn’t about price predictions but rather about the developments within the AI space.
AI’s Impact on Crypto
Buterin expressed his excitement about AI applications on February 19th. He highlighted the potential of these applications in verifying codes and bugs on the Ethereum blockchain. According to him, these applications could be game-changers.
AI tokens have been outperforming many other categories in the market before Buterin’s 2024 opinion. Fetch.ai [FET], an open, permissionless, decentralized machine learning network developed on Ethereum, is a prime example. FET’s price has increased by 109.78% in the last 365 days.
Other factors have also been fueling the AI narrative. One of them is the widespread adoption of ChatGPT in 2023, Open AI’s viral crypto chatbot. Tech analyst Dan Ives referred to AI as the fourth industrial revolution, indicating its potential to transform technology over the next 20-30 years.
Based on Ives’ opinion, AI tokens might perform exceptionally well during this bull cycle. AI projects including Bittensor [TAO], The Graph [GRT], and Injective [INJ] have seen their prices skyrocket. TAO’s performance has been particularly impressive, with a 508,010% increase within the last year.
The rising social volume around these tokens indicates high market interest, which could lead to higher prices. However, if the social volume drops, it suggests that the broader market is overlooking the project.
AI’s relevance in the crypto space does not seem to be fading anytime soon. OpenAI, led by Sam Altman, recently released a new AI tool called Sora, a text-to-video tool. Since its announcement on February 15th, the prices of tokens mentioned above have been surging.
Worldcoin [WLD], also co-founded by Altman, reached a new All-Time High (ATH). If Sora experiences the kind of adoption ChatGPT did, then WLD, alongside other AI tokens, might cross new ATHs.
Eric Bravick, the Head Of Artificial Intelligence at CryptoOracle Collective, believes that the high utility of AI might make the tokens one of the best-performing assets of this cycle. He suggests that AI will remain relevant in the crypto space due to its high utility and potential for hype cycle sustainability.
However, Cuautemoc Weber, the CEO and Co-founder of Gateway.fm, a decentralized blockchain infrastructure node provider, believes that it might be challenging to predict the long-term potential. He noted a recent uptick in the level of traction for AI-related tokens, with Worldcoin’s WLD token and Ocean Protocol’s OCEAN token demonstrating strong market performances.
Another factor driving the rise of AI-themed cryptocurrencies is the demand for Graphics Processing Units (GPUs). GPUs are a crucial part of modern artificial intelligence infrastructure, and they have been developed and optimized specifically for deep learning.
Christopher Alexander, the Chief Analytics Officer at Pioneer Development Group, believes that blockchain has enormous potential to develop and operate some of the most effective AI tools and servers ever created.
Tokens like Render [RNDR], the ERC-20 utility token of the Render network, a distributed GPU rendering network built on Ethereum, are crucial here. Over the last 365 days, RNDR’s price has increased by 236.54%.
The total market cap for the AI category in the market was $10.28 billion at press time. Macroeconomic factors like the AI semiconductor market might push the value higher. For example, the AI semiconductor market is expected to surge to $119.4 billion in 2027, comprising nearly 20% of the global semiconductor market.
If the market cap of AI-themed cryptocurrencies climbs as predicted, it remains uncertain if it will cross $100 billion this cycle. For that to happen, the average values of tokens in the category would need to increase by 10x. However, PAAL AI [PAAL] and Sleepless AI [AI] are two major examples of mid to low-cap cryptocurrencies that might hit 5x or 10x due to the surrounding narrative.
