AI-Backed Crypto Tokens Struggle to Gain Momentum
Even AI sometimes finds it hard to make up its mind. Despite the immense hype surrounding the industry, cryptocurrencies tied to artificial intelligence (AI) have failed to see substantial gains. According to crypto data provider Kaiko, interest in AI-affiliated tokens has remained stagnant, despite billions of dollars being invested in AI startups.
Kaiko’s analysis reveals that overall interest has declined, although a closer look at the numbers tells a more complicated story. In particular, Kaiko analyst Dessislava Ianeva highlights a significant drop in interest for the top five AI tokens (FET, GRT, RNDR, OCEAN, and ROSE), which plummeted from $170 million earlier this year to just $60 million in August.
This decline in AI tokens can be attributed to a shift in global risk appetite, driven mainly by concerns related to China’s alleged economic slowdown. As the crypto market lacks a clear narrative, the impact of China on risk sentiment has been substantial. Additionally, while some projects like Fetch.ai and Ocean Protocol have gained traction, overall trade volumes for AI-related tokens have increased significantly.
Hot Take: The Future of AI-Backed Crypto Tokens
Despite the recent challenges, there is optimism for the future of AI-backed crypto tokens. October historically proves to be a favorable month for the crypto market, and traders are expected to position themselves for the upcoming Bitcoin halving and spot Bitcoin ETFs. Moreover, the macroeconomic environment may become more supportive for risk assets as the Fed’s peak interest rates are now behind us. In this challenging scenario, only the most innovative projects will attract capital, providing potential opportunities for AI tokens in the near term.
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