One analyst called for caution on artificial intelligence (IA), warning that the recent price surge may be fueled more by hype than its actual value.
In a report compiled by David Han, research analyst at Coinbase, the long-term viability of the tokens has been called into question, due to key factors. Intense market competition and technical issues have been flagged as realistic obstacles in the path of AI tokens, later.
Currently, the proliferation of AI in many sectors is driving up prices, but Han believes that current assigned values may be overestimated, without sustainable conditions to maintain this status, even in the short term.
$26 Billion Market Cap for AI Crypto
THE the report examines Crypto-based platforms’ claims that they could have a significant impact on the AI landscape, but questions remain. This caution comes despite the historic returns of large companies in the technology sector.
NVIDIA, the world’s largest supplier of chips used in AIsaw a 15% rise in its shares this week, part of an overall boom.
The total value of AI crypto projects has already surpassed $26 billion this year, with CoinGecko highlighting that 37% of these gains occurred in the last seven days. This would be cause for serious optimism for some, but Coinbase urged restraint on the future prospects and bold claims of prosperity raised by crypto platforms.
Han was aware of the upcoming regulatory challenges and broader market dynamics that work against AI tokens, and highlighted the technical difficulties presented by decentralized networks, which are the main idea of crypto-AI projects .
“AI tokens generally enjoy strong associated performance both in the broader crypto market as well as in AI news headlines,” the analyst said.
“Rapid changes in AI make us cautious about bold claims that crypto-focused platforms are in a unique position to disrupt the industry, making the path to long-term value creation uncertain in our view term and sustainable for most AI tokens, especially for those with a fixed rate. symbolic model,” Han continued.
So far in 2024, AI tokens such as Akash and Render have performed better than the entire crypto market, with respective gains of 146% and 99%, comparing favorably to the increase not negligible 54% of Bitcoin.
Image credit: Ideogram
