The bot craze sweeping the tech world amid bot launches like ChatGPT and Bard has reached cold currency, with interest in tokens linked to blockchain AI projects skyrocketing.
Average daily volume for the largest coins, including SingularityNET, Fetch.AI and Render, surpassed $1 billion in early February, setting a two-year record, according to the firm data Kaiko.
AI-connected blockchain products cover a range of services, including payments, transaction models, machine-generated non-perishable tokens and blockchain-based markets for applications AI, where users pay developers in cryptocurrency.
So far, investment returns are strong. The CoinDesk Indices Computing Index, which includes AI-related tokens, is up 60% this year, with a significant spike in February as OpenAI's ChatGPT saw a surge in usage.
While trading volumes fell in March, they remain above the long-term crypto industry average, and many tokens have significantly outperformed bitcoin with year-to-date returns ranging from 150% to 780%, Kaiko analyst Dessislava Aubert said.
Investments in the sector have also increased, with examples such as CryptoGPT where users can sell them data to AI companies, which raised $10 million in funding this month.
However, despite strong returns this year, the AI-crypto sector remains niche. The combined market capitalization of CoinGecko's AI-sorted coins is 2,7 billionmillions dollars, eclipsing the overall $1,2 trillion crypto market.
The potential of AI-connected crypto applications has investors hoping that they can cut through the hype to identify projects that can help solve some problems, drive more users to blockchain products, and guarantee some stable returns.
“Some AI projects could actually end up being the 'killer app' for public blockchains,” said Pranav Kanade, portfolio manager at VanEck.
Some industry observers see blockchain-based marketplaces as offering an easy way for system developers to gain market share and for smaller users to access new AI technology.
SingularityNET has seen the market value of its token soar from $52 million to over $414 million this year.
Other potential long-term use cases include using blockchain as proof to distinguish between AI and human-generated content.
