Coinbase Says Value of Many AI Tokens is “Overstated” as Sector Surges 37% in Past Week
The artificial intelligence (AI) token market has experienced a surge in prices that, according to a research report from leading crypto exchange Coinbase, may be driven more by hype than actual utility.
The report , authored by Coinbase research analyst David Han, highlights the stiff competition and technical challenges faced by AI projects, potentially hindering their long-term viability.
Han’s report suggests that the value potential of many AI tokens may be overstated due to the prevailing attention on the AI industry, and that these tokens may lack sustainable demand-side drivers in the short to medium term.
The report questions the bold claims made by crypto-focused platforms asserting their unique disruptive potential within the AI industry.
The total value of AI crypto projects has already surged to $26 billion this year, with CoinGecko reporting that 37% of these gains occurred in the past week alone, coinciding with a rise in Nvidia’s stock.
Nvidia, a market leader in AI chip technology, has witnessed a 15% increase in its shares this week.
Despite the recent rally, Coinbase remains cautious about the transformative claims made by crypto-focused platforms in the AI space.
The rapid evolution of AI technology has created uncertainty regarding the future outlook of most projects.
Han highlighted the uphill battle faced by crypto AI products against broader market and regulatory forces.
He also pointed out the technical challenges associated with decentralized networks, which form the core concept of crypto AI projects, further complicating their path to success.
“AI tokens generally benefit from strong associated performance in both the broader crypto market as well as related AI news headlines.”
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