The use of artificial intelligence (AI), also called machine learning, is increasing in various sectors of the economy such as education and commerce. As expected, the application of AI has come to the blockchain sector, particularly in trading. Most recently, several blockchains developed AI focused cryptocurrencies. This post will discuss the popular AI cryptocurrencies and their current market performance.
Will AI cryptocurrencies contribute to the next Bull Run?
Considering the popularity that crypto artificial intelligence has brought to the blockchain sector, many crypto fanatics contend that AI cryptocurrencies are likely to trigger the next bull market cycle. That sentiment was popular on Twitter following the January to February strong price performance by AI focused cryptocurrencies.
The price performance of the AI cryptos during these two months has shown that they have the potential to push the general crypto market up. Data on cryptocurrency exchanges such as the Gate.io platform show that recently AI cryptocurrencies had an average of 80% price increase within one week.
Notably, some of these tokens have gained by large margins this year. For instance, the price of SingularityNET (AGIX) increased by over 650% within 30 days and is now within the top 100 best performing cryptocurrencies.
In recent weeks, Big Data Protocol (BDP) increased by 2,100% within a single week while MDT gained by 150%. Artificial Liquid Intelligence (ALI), Fetch AI (FET), and Image Generation AI (IMGNAI) were other top gainers.
Another good example is that of $GRT whose price increased by 180% since January 2023. Likewise, the value of AGIX increased by 1,182%, ALI gained 987%, DeepBrain Chain (DBC) 820%, FET 533% and Ocean Protocol (OCEAN) 247% since the beginning of the year.
As you can see in the image, all the AI tokens listed gained within the last 30 days.
How much influence can AI cryptocurrencies have on the total crypto market?
What is worth noting is that a class of cryptocurrency such as AI tokens can trigger a bull market because they create confidence in the sector. As we speak, there are many AI cryptocurrencies which are on the market including Fight Out ($FGHT), Numeraire (NMR, Cortex (CTXC, Velas (VLX), Ocean Protocol (OCEAN), and dKargo (dKA)
A majority of these AI-related cryptocurrencies can be found across numerous exchanges, such as Gate.io. Tokens like AGIX, FET, BDP, GRT, RLC, DKA, DHA, CQT, OCEAN, NMR, and ALI are all listed there.
However, the fact here is that if the trading volumes of all these AI tokens and their prices increase they have the potential to create a bullish moment within the entire market leading to a bull market cycle.
Why are the prices of AI tokens surging?
First, let’s understand what AI cryptocurrencies are. Generally, artificial intelligence refers to computer science that enables machines to “make decisions” based on available data in the same manner that human beings do.
Artificial intelligence has been used for image generation software, chatbots, and trading systems. That said, AI tokens are cryptocurrencies that drive platforms that use artificial intelligence technology.
There are several factors that have led to AI cryptocurrency price spikes. Increased interest in artificial intelligence, market hype, speculation, and an increase in AI use cases have influenced their price rises.
Institutional interest in artificial intelligence
The rise in the use of artificial intelligence in various sectors of the economy has helped to increase demand for AI cryptocurrencies. The development of chatbot ChatGPT and Dall-E, image generation software, launched by OpenAI, in 2022 has shown the contribution artificial intelligence can make in different sectors of society.
As a result, when AI cryptocurrencies were introduced they became popular on the market. Basically, AI has many use cases such as fraud detection, risk protection, automation, improved customer experience, market sentiment analysis as well as security and compliance.
Speculation is another reason that is driving the prices of AI tokens high. Such cryptocurrencies with large communities and buzz have been rallying since the beginning of 2023.
Aditya Khanduri, the head of marketing at Biconomy said, “I believe that the current AI trend is still pretty speculative, leading to a jump for tokens like OCEAN, ALI, and AGIX. Some of the tokens with more buzz and followings have been pumped and it’s less about the actual tech behind it.”
Of course, the hype could be the reason behind the current surge in prices of AI cryptocurrencies. Speculators might have chipped in with the aim of getting short-term price gains.
To this effect, Valentina Drofa, a financial market consultant, said, “Once the market starts livening up a bit, all sorts of new trends come out of the woodwork. And they are not all as solid as they might look.”
She added, “There is a risk that this whole ‘new trend’ is going to end up in an empty hype, as there are many speculators that would seek to make use of short-term price pumps.”
Crypto traders have speculated In recent discussions on Twitter that AI-related cryptocurrencies could potentially fuel the upcoming bull market cycle. Examples of such AI tokens include FET, AGIX, ALI, NMR, CTXC, VLX, OCEAN, and DKA. A majority of these digital currencies can be found on crypto exchanges like Gate.io, among others.