Altcoins Fly Higher as Interest in AI Tokens Surges by 400%
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The research released by crypto exchange Bitget shows a significant growth in investors’ interest in the artificial intelligence (AI) sector in February. Readers can get critical insights into the monumental shift in investor sentiment toward AI and Big Data tokens with a detailed analysis of user data across various AI-related cryptocurrencies.
The report delves into how the AI application sector is evolving with blockchain technology and cryptocurrency tokenization, changing assumptions that interest in AI tokens drops after a quick surge.
Key Takeaways:
- — AI trading zone saw a remarkable 400% surge in trading volume in February;
- — The average market cap in the AI zone has increased by 77% since January;
- — The AI market is projected to exceed $1.8 trillion valuation by 2030;
- — AI and Big Data tokens have a total market capitalization of $22.35 billion;
- — AI concept coins like WLD, GRT, and ARKM are generally rising in 2024;
- — OpenAI’s Sora paves the way for growth in the AI sector in 2024.
The AI sector has been influential in the technological industry in recent years. Its unprecedented growth has led to a significant shift across both the tech industry and the cryptocurrency world. This transformation can be attributed to various innovative projects and products that leverage artificial intelligence.
Financially, the growth is evident. For example, the AI market was valued at approximately $200 billion in 2023, becoming the largest investment channel for global tech companies. Enterprises like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Google (NASDAQ:GOOGL) have heavily invested in AI-focused startups and projects because of their promising potential.
In 2023, Google made headlines with its massive $2 billion investment in Anthropic, an artificial intelligence startup, following Microsoft’s $10 billion in OpenAI over several years.
Moreover, AI remains a significant tech investment direction for many businesses in 2024. Analysts predict a CAGR of 15.83% between 2023 and 2030. That means the sector is on course to reach a trillion-dollar market at the end of 2030. Analysts also project that the US will have the largest market size globally, exceeding $106 billion in 2024.
AI Concept Coins are Revolutionizing the Cryptocurrency Industry
AI projects have shown massive potential for the global tech ecosystem. At the same time, AI tokens have been on the rise despite the initial fears that investors’ interest in them will dwindle after their rapid growth at the beginning of the year.
This is because AI’s growth in the global technological landscape has made AI concept coins more attractive to crypto enthusiasts. In recent times, retail and institutional crypto investors have turned to tokens in the asset class as alternative investment opportunities to popular cryptocurrencies like Bitcoin and Ethereum.
These AI coins leverage artificial intelligence and blockchain technology to create decentralized networks supporting AI-based projects. They use sophisticated algorithms, AI models and datasets to build tradable assets on a blockchain network.
Interest In AI Tokens Trading Surges By 400%
The AI sector saw significant growth in February, spurred by OpenAI’s launch of its Sora model, which has notably advanced AI creativity and garnered considerable market interest.
Bitget’s AI zone experienced a remarkable 400% surge in trading volume and the average daily number of traders was up by 80% in February. Furthermore, the average market capitalization in the AI zone increased by 77% since January.
If we take a closer look, we can see a more significant increase between February 15 and February 29. During this period, the number of daily trading users in the AI zone increased by 179%, and the trading volume rose by 480%. AI concept coins like WLD, GRT, and ARKM lead the way, with the AI market projected to exceed a valuation of $1.8 trillion by 2030.
Source: Cryptorank
The shift in investor behavior and market trends reflect the constant search for affordable assets with low entry barriers, high-value potential, and significant gains. For instance, top AI cryptocurrencies like Worldcoin (WLD), Livepeer (LPT), and Arkham (ARKM) are soaring in the market.
As of March 2024, Sam Altman’s WLD token trades at around $7, with an increase of about 350% since it was listed in 2023. Similarly, LPT and ARKM have grown by nearly 140% and over 100%, respectively, since they launched. Altogether, Bitget data at press time shows that the top AI & Big Data related coins had a market cap of over $30 billion on March 5.
Market analysts believe the major driving forces for the growth of AI cryptocurrencies are the exciting developments in the sector. OpenAI’s recent launch of Sora, a text-to-video AI model, generated large excitement among AI investors and enthusiasts alike.
Similarly, Nvidia (NASDAQ:NVDA)’s latest Q4 financial report showed its earnings exceeded expectations, reaching $22.10 billion in quarterly revenue. The company’s success can be attributed to the AI boom, driving a further rise in the demand for AI concept coins.
Challenges Facing the Growth of AI Concept Coins
Despite the overall healthy market trend and high investor sentiment in speculative AI investing, many factors can negatively impact the exciting advancements in the AI cryptocurrency space.
Legal and Regulatory Challenges
The most prominent setbacks are legal and regulatory issues. First, the crypto sector lacks clear regulation across different countries. For instance, the US Securities and Exchange Commission constantly clamp down on cryptocurrencies in the United States. Conversely, countries like El Salvador have friendly environments to help Bitcoin and other cryptocurrencies thrive.
At the same time, artificial intelligence completely lacks regulation globally. That means its intersection with a crypto sector with unclear regulatory guidelines poses a significant challenge to the advent of AI cryptocurrency tokens and projects.
However, after several months of intensive dialogues between the European Parliament and Council, both parties reached an agreement called the European Union (EU) AI Act in December 2023.
In addition, the AI Act’s enforcement and implementation are limited to the EU member states only. That means the development of artificial intelligence and its successful implementation in other countries remains limited.
Limited Use Cases
Another limitation to the advancement of AI crypto projects is their limited use cases. Many of these crypto projects lack real-world utility and thrive on the growth of the broader AI sector or social media hype.
As such, an unprecedented decline in the growth of AI projects may directly impact AI concept projects and tokens. Their high dependence on social media hype also makes them highly volatile assets.
AI & Big Data Tokens: The Future of Tech Investments
The EU AI Act has paved the way for a comprehensive legal framework for the use of AI by prominent key players globally. However, the regulatory landscape for AI cryptocurrencies remains unclear.
The AI crypto sector calls for more straightforward regulatory frameworks – especially in pivotal countries like the United States — to boost investors’ confidence further and make AI and Big Data assets the future of tech investing.
As the first few months of 2024 have shown, AI and Big Data tokens have recorded massive gains and garnered unforeseen interest from investors. From an analyst’s perspective, AI cryptocurrencies will only grow in demand and interest as the year progresses. By Q3, we will likely see a massive transformation in financial investing through AI concept cryptocurrencies.
Overall, the AI sector is expected to maintain an upward trend driven by technological innovation, a friendlier regulatory landscape, increased market demand, and high speculation sentiment.
However, it’s crucial to note that the AI coin market is just shaping up, making it highly volatile. That means investing in AI coins can be risky, and investors require adequate research to make informed decisions.
