Artificial intelligence (AI) crypto tokens are failing to live up to their lofty 2024 goals despite Nvidia’s (NVDA) recent conference sparking bullish sentiment among AI stocks in the traditional markets.
Last March, the NEAR token doubled in the lead-up to Nvidia’s annual conference, gains that were mirrored across the wider crypto AI market. Fetch.AI (FET), The Graph (GRT) and SingularityNET (AGIX) all posted significant rallies to the upside in unison with the conference.
This year, however, AI tokens have shown their fragility. NEAR is down by more than 8% in the past 24 hours while FET slumped nearly 9%. In contrast, NVDA began the year trading at $133 and rose by 15% to $153 on Monday as the conference began.
There are several reasons why AI tokens are no longer receiving the attention they once enjoyed. One factor is the emergence of AI agent tokens, which share similarities with memecoins due to their volatile nature and cult-like followings. Investors are more inclined to trade these tokens as they present the potential for triple, even quadruple-digit gains compared to regular AI tokens, which are harder to move due to their larger market caps. However, just like memecoins, AI agent tokens also carry the risk of deeper losses.
Another contributing factor is a noticeable decline in interest; Google search trends reveal that searches for “NEAR token” and “Fetch.ai” have decreased by 47% and 84% respectively since March.
The fall from grace is hardly surprising, given the fickle nature of the crypto market. This market has a propensity to penalize sectors that rapidly rise based on speculation. Last year’s rally exemplified this phenomenon: investors flocked to AI tokens under the belief that they would drive the crypto bull market. Instead, it was Bitcoin that captured attention, bolstered by tens of billions of dollars in ETF inflows and a surge of bullish sentiment surrounding Donald Trump’s presidential victory.
Despite these challenges, AI tokens are still in their infancy. Few crypto AI projects have achieved mainstream adoption, as many products remain in development. Nvidia, conversely, is actively advancing the field, having recently announced a $3,000 mini supercomputer called Digits, set to be available for purchase in May.
