Over the past 90 days, Artificial Intelligence (AI)-based cryptocurrencies have suffered a sharp correction in price and volume.
Artificial Intelligence (AI)-based cryptocurrencies lost 25% of their value over the past 90 days. This pullback in the crypto market contrasts with the powerful push in the stock markets. In fact, the actions covered by this technology print almost +24% to the Nasdaq so far this year.
Three months ago, the currencies linked to this technology enjoyed a great boost. Some $4 billion in capitalization hit these cryptos amid the nascent AI rush. However, since then they began to lose traction. Until now, approximately $1 billion would have evaporated.
The push of the Nasdaq 100, led by NVIDIA, Microsoft and Alphabet, is strongly tied to enthusiasm for AI. That strength doesn’t seem to support their counterparts in the virtual currency market, though, at least not to the same extent.
The Waning Development of AI-Based Cryptocurrencies
By the end of February, AI-powered cryptocurrencies appeared to be only in the early part of their growth. The push led to the creation of some 74 different coins that looked promising on paper. However, from that date until now reality has been contrary to that assumption.
The ghost of the Metaverse seems to surround the coins of this new buzzword among investors. It is worth noting that coins like Mana are currently stagnant, after losing much of their value in 2022. These tokens were not immune to the winter in the digital currency market.
Metaverse currencies, however, had the characteristic of being high at the same time that the investment was in the forefront. Currently, however, their value is dwindling, despite the fact that investors seek exposure to that technology.
Whether the fate of AI-based cryptocurrencies is the same as those covered in the Metaverse is uncertain. Nevertheless, these assets can be profitable, despite being high risk and volatility assets.
Value of Coins Falls Along with Trade Volume
The fall in value of AI-based cryptocurrencies is preceded by the loss of investor interest in them. Many of these tokens are, in fact, not linked to an Artificial Intelligence project that persuades investors to invest in them.
The latter is the key to the difference between these tokens and Nasdaq stocks, which are now experiencing strong bullish momentum. In any case, during the peak of the AI coins at the end of February, the trading volume of these marked a 24-hour high of $444.39 million dollars on the 27th of that month. In parallel, as already mentioned, the capitalization reached $4.03 billion.
Now, in both aspects they hit rock bottom. According to data from the analytics portal, Cryptoslate, the total AI tokens (currently 89) have an average valuation of $2.93 billion. Consequently, despite the fact that 15 new coins emerged in the last three months, in that same period, $1.1 billion evaporated.
An important fact that is noted about this new submarket is that it now occupies 0.26% of the entire crypto market. Three months earlier, at its peak, AI-based cryptocurrencies held 0.37%. Similarly, the top five tokens suffered losses without exception.
Over the last 7 days, the outlook has improved for these tokens, and the rally in the broad crypto market helps them. For example, INJ now boasts a weekly growth of +7.89%. Likewise, GRT has +5.72% in the same period. AGIX +13.22% and OCEAN +7.06% just to name a few.
By Audy Castaneda
