AI-focused cryptocurrency projects have experienced a surge, along with a spike in tech equities such as Nvidia and coins associated with the growing interest among investors in machine-learning applications.
TakeAway Points:
- The value of artificial intelligence tokens has increased in the crypto market.
- AI tokens’ aggregate market value has increased dramatically to $26.4 billion from $2.7 billion in April last year.
- Investment management VanEck has estimated that, in their base case, revenue from AI crypto projects might reach $10.2 billion by 2030
AI Token Value Outpace Bitcion
Over the past year, as the value of bitcoin has reached all-time highs, the ascent of various AI-related cryptocurrency tokens has surpassed even that of bitcoin, according to Crypto Tracker.
According to CoinGecko data, their aggregate market value has increased dramatically from just $2.7 billion in April of last year to $26.4 billion. In the last 30 days, tokens associated with these projects have increased by 145% to 297%.
“As both AI systems and blockchain networks continue to grow, we will see more and more use cases fusing together the two industries,” Markus Levin, co-founder of blockchain data storage firm XYO Network, said.
AI-linked tokens are included in the CoinDesk Indices Computing Index, which has increased by nearly 165% in the last year, surpassing even bitcoin’s 151% increase to all-time highs.
According to data from Kaiko Research, trading volumes for AI tokens have also increased significantly this year, reaching an all-time high of $3.8 billion in late February.
“There is a significant chance that AI applications will be crypto’s raison d’être,” Matthew Sigel VanEck’s fund manager and Patrick Bush said in a note.
Future Predictions
VanEck investment management has estimated that, in their base case, revenue from AI crypto projects might reach $10.2 billion by 2030, and, in their bullish scenario, it could reach over $51 billion.
Currently, some of the most popular blockchain initiatives are Fetch, a peer-to-peer blockchain network for exchanging AI-generated graphics, and the Render Network. AI is a platform for creating AI applications, and SingularityNET is a market for AI services.
“Investors are starting to realize that if you want real value, you need products that are uncorrelated to the crypto market,” Ahmad Shadid, founder of AI-focused blockchain startup io.net, said.
“AI-linked blockchain products” offer services such as cryptocurrency-based marketplaces for AI applications, machine-generated non-fungible tokens, trading models, and payments.
AI Benefits from Blockchain
VanEck identified the following as the main areas where blockchain technology provides practical benefits to AI development: data verification; using crypto tokens as rewards; creating physical compute infrastructure; and transparency in demonstrating digital ownership.
According to io’s Shadid, offering cryptocurrency tokens as incentives enables rapid scalability. Later this year, his company intends to introduce a token.
“The reason we can scale fast is because of the token we have coming out,” Shadid said. “The token incentivizes owners of physical infrastructure to bring their computers onto our network,” he added.
