- Artificial Intelligence tokens may lack sustainable demand side drivers in the medium to short term, according to Coinbase.
- The exchange’s recent market intelligence report states that value potential for most AI tokens is likely overstated.
- TAO, AKT, RNDR, WLD find mention in Coinbase’s report, prices decline slightly on Friday.
Coinbase, one of the largest crypto exchanges in the world, published a market intelligence report that addresses the recent gains in Artificial Intelligence (AI) tokens like Bittensor (TAO), Akash Network (AKT), Render (RNDR), and Worldcoin (WLD).
These AI tokens have rallied in the past two weeks as the AI narrative made a comeback among crypto market participants, catalyzed by OpenAI’s text-to-video generator tool, NVIDIA Q4 2023 earnings report and the upcoming AI conference by the technology company.
Also read: OCEAN, GRT, FET: Artificial Intelligence projects with high developer activity
Artificial Intelligence tokens are likely overvalued for this reason
Coinbase’s market intelligence report, published on March 6, addresses the recent rally in AI tokens like RNDR, AKT, TAO and WLD. The analysts believe that the value potential of AI tokens has been overstated since their research reveals that there are no significant drivers of value for these tokens in the medium to short term.
The exchange’s analysts believe that the rally in AI tokens is likely catalyzed by the attention that the industry received recently, but this may not be sufficient to drive consistent gains in the native tokens of AI protocols like Bittensor, Akash Network, Render and Worldcoin.
The report reveals that while there was an initial uptick in Akash Network in number of users year-to-date, this was largely driven by increased usage of their storage and compute resources. Coinbase analysts point out that this increase is unsustainable since more providers have joined the network.
Akash Network Usage and Coinbase. Source: Coinbase report
The report adds that there is a growing concern over the output quality and biases of AI models. Certain crypto projects like Bittensor are focused on finding a decentralized, market-based solution to this problem. However, there are a number of technical challenges that could stand in the way of the adoption of this project.
Native tokens of these projects are, therefore, likely overvalued and could be hit by a correction in the medium to short term.
The AI token rally in the past two weeks was riding on the popularity of OpenAI’s latest offerings and NVIDIA’s upcoming AI conference. At the time of writing, AI tokens have noted a slight decline in their price.
AI token prices. Source: CoinGecko
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections
MAGA trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption.
Bitcoin ETFs beat Gold ETFs with 65% gain since launch
Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand
Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF
Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.