Written by Medha Singh and Lisa Pauline Matakkal
(Reuters) – The artificial intelligence boom is sending shockwaves through the cryptocurrency market.
Coins tied to AI-focused crypto projects have soared alongside tech stocks like Nvidia, driven by insatiable investor appetite for applications like machine learning.
The rise of many AI crypto tokens has even outpaced Bitcoin's rise over the past year, as the world's largest cryptocurrency soars to record levels.
The combined market value of both companies has ballooned to $26.4 billion, up from just $2.7 billion last April, according to CoinGecko data. Tokens linked to these projects have increased from 145% to 297% in the past 30 days.
Some market watchers say cryptocurrencies and blockchain technology could help solve some of the AI industry's initial problems, such as the need for privacy and computing power, so the industry's If more optimistic predictions come true, there could be even more room for action.
“As both AI systems and blockchain networks continue to grow, we will see more and more use cases that merge the two industries,” said Markus Levin, co-founder of blockchain data storage company XYO Network. Ta.
The CoinDesk Index Computing Index, which includes AI-related tokens, has soared more than 165% in the past 12 months, to record levels, outpacing even Bitcoin's 151% rise.
The trading volume of AI tokens has also increased sharply this year, reaching an all-time high of $3.8 billion in late February, according to data from Kaiko Research.
“There is a strong possibility that AI applications will become the raison d’être for cryptocurrencies,” VanEck fund managers Matthew Siegel and Patrick Busch said in a note.
Top blockchain projects at the moment include Render Network, a blockchain platform for peer-to-peer sharing of AI-generated graphics; Fetch.AI, a platform for building AI apps; and Fetch.AI, a platform for building AI apps. There are SingularityNET and others.
“Investors are starting to realize that if they are looking for real value, they need products that are uncorrelated with the crypto market,” said Ahmad Shadid, founder of AI-focused blockchain startup io.net. “There is,” he said.
winners and losers
AI-linked blockchain products include a wide range of services, including payments, transaction models, machine-generated non-fungible tokens, and blockchain-based marketplaces for AI applications where users pay developers in cryptocurrencies. included.
Investment manager Van Eck predicted that revenue from AI crypto projects could reach $10.2 billion by 2030 in a base case and more than $51 billion in a bullish scenario.
VanEck said the main areas where blockchain technology brings real-world value to AI development include the use of cryptographic tokens as rewards, the development of physical computational infrastructure, data verification, and in proving digital ownership. He cited transparency.
io's Shadid said offering crypto tokens as incentives allows for rapid scalability. His company plans to launch the token later this year.
“The reason we can scale so quickly is because of the tokens we have out there,” he added. “This token incentivizes owners of physical infrastructure to connect their computers to our network,” Shadid added.
But like the AI boom itself, picking winners and losers can be risky.
“The integration of AI networks and blockchain-based networks is still in its infancy, and the utility of many tokens remains highly uncertain,” Levin cautioned.
(Reporting by Lisa Matakal and Medha Singh; Editing by Vidya Ranganathan and Pravin Char)