These days, it’s hard to miss the vibrant energy of the cryptocurrency market, especially when it comes to tokens related to fast-growing technologies such as artificial intelligence (AI).
However, last week painted a different picture for AI-based cryptocurrencies. Prominent companies in this niche, such as The Graph, Ocean Protocol, and SingularityNET, recorded significant declines. These AI-tied tokens have weathered more difficult conditions in a week, while much of the overall crypto market remains on a stable trajectory.
Cryptocurrency market, source: coin 360
Microsoft’s AI failures
To understand this decline in cryptocurrencies, we have to look at the broader picture. The Wall Street Journal reports that Microsoft, a global technology powerhouse and key supporter of AI technology, is facing challenges with its generative AI products.
microsoft $MSFT One of the first generative AI products loses money – WSJ
— Evan (@StockMKTNewz) October 9, 2023
Despite working with OpenAI, the creator of ChatGPT, Microsoft’s venture has not been as profitable as expected. The Wall Street Journal reports that Microsoft’s AI products cost between $20 and $80 per user per month, using up the company’s resources. Until computing costs come down, tech giants may need to reconsider their pricing strategies for future AI software.
Tokens under turbulence
Traditional financial players face challenges such as: AI challenges, the cryptographic realm is not spared. The Graph (GRT) is leading the decline with a decline of 9.93% over 7-days. Ocean Protocol (OCEAN) was not far behind, dropping 13.32%, and SingularityNET (AGIX) was also down 9.6% over the past week.
Another notable mention is ARKM, the native token of blockchain analytics company Arkham Intelligence. It saw the most significant decline, dropping more than 20% in just one week. Since its launch earlier this year, ARKM has yet to deliver on its promise, and its current trading price is far from its original launch price.
meteor The Rise of OpenAI’s ChatGPT Last year saw a wave of excitement and investment in the AI space. Tech giants such as Google’s Alphabet and China’s Baidu are already preparing to launch potential chatbots. However, while large companies such as Microsoft, Google, and Baidu may have the resources to weather this volatile situation, smaller companies and investors looking for the next big thing in AI may need to brace themselves.
Baron’s recent situation Explanation He suggested caution, hinting that the current feeding frenzy around AI may not end happily. Despite the appeal of AI and its integration with blockchain, recent changes in the market suggest that this area remains unpredictable.
broader market movements
Apart from AI-specific tokens, the broader cryptocurrency market is experiencing high activity.Cryptocurrency bellwether Bitcoin soars 39% per year, many altcoins are also on an uptrend. However, despite this market bullishness, AI-linked tokens are underperforming significantly.
The complex interplay between AI and cryptocurrencies is still evolving. AI promises innovative solutions across industries, but its convergence with crypto assets brings even more volatility and unpredictability. Investors and stakeholders should therefore approach this situation with excitement and caution, recognizing that today’s technology darlings may face tomorrow’s challenges. The current downward trend in AI-related cryptocurrencies is a timely reminder that in technology and finance, not all that glitters is gold.