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Here’s Why Artificial Intelligence Focused Cryptocurrencies Are Vastly Outperforming Bitcoin
Tokens utilizing AI technology have been on a tear in the past months. Some are sold on the hype, while some remain wary.
Crypto markets are known to be fueled by narratives, and artificial intelligence (AI) is the latest trend.
Prominent traders on Crypto Twitter are heralding AI-based tokens as the sector that might lead the next bull market cycle. They may be right so far: Such tokens are up an average of 80% in the past week alone, CryptoSlate data shows.
Among the biggest gainers have been tokens for platforms such as Alethea's artificial liquid intelligence (ALI), fetch.ai (FET) and SingularityNET (AGIX), which have surged as much as 220%, as CoinDesk previously reported.
The tokens of AI-based upstarts like Image Generation AI (IMGNAI) have more than tripled over a two-week period. The protocol allows users to generate artwork using text disruptions on social platforms such as Discord.
One-time popular tokens from 2018 and 2021, such as Big Data Protocol (BDP) and Measurable Data (MDT), seem to have jumped on the hype with tweets that seem to remind investors of how they utilize AI technology within their blockchain applications.
BDP has surged 2,100% in the past week, CoinGecko data shows, while MDT has jumped 150%. Both protocols use their tokens to commoditize data, allowing providers and buyers to exchange data securely and anonymously.
Crypto majors such as bitcoin and ether have paled in comparison, rising just 30% each in the past month despite fundamental catalysts. However, the market capitalization of major tokens is upward of $300 billion, meaning they require significant amounts of investment and public interest for prices to surge multifold within a few weeks.
AI broadly refers to the simulation of human intelligence in machines programmed to think and act like humans. Popular applications for this technology have so far been limited to chatbots, self-driving cars, optimizing search in online marketplaces and image-generation software – but futuristic usecases envision wholly autonomous cities, cyborg humankind and interstellar travel.
Much of the recent surge in AI tokens emerged after the public launch of chatbot ChatGPT and image generation software Dall-E in mid-2022. Both are traditional software that do not use cryptocurrencies or blockchain and were launched by OpenAI, which recently raised $10 billion from Microsoft at a $29 billion valuation.
Such institutional interest has helped create a compelling argument for crypto traders to bet on AI-focused tokens as the next growth sector.