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AI Cryptos After the Hype — An Analysis

For a long time, AI cryptos — projects that utilize artificial intelligence — have been flying under the radar of most investors. Then, on the 30th of November 2022, ChatGPT went live. This triggered a lot of interest in this niche of the crypto market and as a result, a lot of money went into these projects.

About six months later, I want to take a closer look at the current status of AI cryptos. I also want to find out the main drivers behind the developments of prices, market caps, and trading volume of these projects. Is it really all about the current hype around AIs, or is something else having an impact?

Let’s see what we can find out!

To do this, have a look at this Bitcoin price chart.

Bitcoin price chart of the last 365 days with noteworthy points in time marked down.

I added 5 annotations (the black lines) to point out noteworthy points in time.

  1. 30th of November 2022 — The day Chat GPT went live.
  2. 15th of December 2022 — At this time, ChatGPT reached the mainstream and saw its first uptick in user numbers caused by a general increase in user interest as shown by Google Trends data.
  3. 9th of February 2023 — Bitcoin saw a sudden sharp move down.
  4. 11th of March 2023 — Bitcoin experienced another correction.
  5. 16th of April 2023 — Bitcoin reached a momentary high point.

Here, I added the same annotations to a Google Trends chart showing search interest over time in the term ‘ChatGPT’.

Search interest in the term ‘ChatGPT’. Source: Google Trends

With these days marked down, let’s now look at data of the currently four largest AI cryptos by market cap ($GRT, $FET, $AGIX, $OCEAN).

Here’s the price development over the last year.

The next chart shows the development of the four AI cryptos’ market cap development.

And the final chart shows the daily trading volume in USD over the last year.

Lots of charts, lots of insights. What can we learn from all of this?

First, we need to note that correlation does not necessarily mean causation. But when comparing the different charts and annotations, a few patterns strike the eye.

  • What is striking is how the four projects examined are acting in step with one another.
  • We can see that at the time of ChatGPT hitting the mainstream (2), there is a noticeable increase of price, market cap, and daily trading volume in all four projects.
  • This spike pales in comparison with the strong upwards movement seen in price and market cap in January and February, when the whole crypto market was soaring.
  • On the 9th of February (3), when Bitcoin had a sharp correction, we see another strong spike of price, market cap, and daily volume in all four AI cryptos which was immediately followed by a crash. What caused this? People suddenly moving out of Bitcoin? Or was it a blow-off top after the long upwards move before? What’s also noteworthy in this context is that after a long time of increase, the search interest in ‘ChatGPT’ levels off according to Google Trends.
  • Bitcoin’s strong downwards move which was followed by a pump around 11th of March (4) was mirrored by the developments in price, market cap and trading volume of AI cryptos. What’s also interesting is that after this, the search interest in ‘ChatGPT’ started to rise again after going sideways for some time. Coincidence or something else?
  • Finally, Bitcoin’s strong upwards move around 16th of April (5) again can also be seen in the movements of the four AI cryptos.

So what can we take away from all of this?

To me it seems that the hype around AI services such as ChatGPT played a major role in the initial upwards movement we saw until the top in February (annotation 3). Since then prices of all four AI cryptos analyzed here have slowly been sliding downwards. Also, another factor now seems to have a much greater impact on the price, market cap and daily trading volume developments of AI crypto: Bitcoin — or the state of the crypto market in general.

In this context, it is noticeable that Bitcoin has performed better than AI cryptos since February. Is this a sign that the hype surrounding AI services is losing its radiance?

Read more: https://medium.com/coinmonks/ai-cryptos-after-the-hype-an-analysis-7c65cffaf5e

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