The news of tech giant Nvidia crossing the $2 trillion mark for market capitalization has spread across the tech realm. The surging demand for artificial intelligence chips testifies to the stellar performance of Nvidia.
However, besides the tech industry, there is yet another realm that has been immensely impacted by Nvidia’s market cap.
Any guesses?
Well, it is the crypto space, which has seen a surge in the value of AI tokens. Needless to say, the AI coins have witnessed a steep rise after the Nvidia earnings.
So, what’s driving this growth? And how exactly are AI tokens going to shake things up in the crypto world? Read on to know more!
AI Tokens – Getting Started!
AI tokens are cryptocurrencies that support AI-based applications, projects, and services in the blockchain realm. There are three objectives for AI tokens:
- Facilitating transactions within AI-powered platforms
- Enabling protocol governance & empowering token holders to participate in the decision-making process
- Incentivizing users with rewards
The Nvidia Effect on AI Tokens
The rise in the market cap of Nvidia caused an upsurge in the value of AI cryptos. Significant AI cryptocurrencies, such as SingularityNet ($AGIX), Fetch.AI ($FET), Render ($RNDR), etc., witnessed prominent price increases.
According to CoinGecko, the overall market capitalization of AI and big data tokens reached beyond $17 billion, after the financial success story of Nvidia.
What caused such a rise?
According to industry experts, such as Strahinja Savic, head of data and analytics at FRNT Financial, the financial success of Nvidia and the launch of Sora by OpenAI have created a wave of optimism surrounding AI. Such optimism is also reflected in the AI cryptos. Savic also claims that such a cascading effect is not new, rather, it has been witnessed in the past where metaverse-related coins surged when Facebook changed its name to Meta.
An inclination toward accessing niche AI derivatives cannot be ruled out. It also seems that traders investing in AI tokens are inclined to invest more in niche blockchain-based AI derivatives. Such an opinion is also concurred by Savic who believes that there is an increasing exposure to niche AI blockchain-based networks via AI tokens.
Moreover, it is widely believed that investors who do not have access to U.S. equities like NVDA are more inclined to try their luck with AI coins.
Is NVIDIA’s AI Token Boost Here to Stay?
With the impact of Nvidia’s groundbreaking income reports on the value of AI coins, the question of sustainability persists. According to industry experts, unless AI-driven crypto projects do not infuse meaningful purpose and use cases, such growth could be shortlived.
Ken Bassig, Head of Research at a crypto trading firm, Magnus Capital, states that most of the AI-based crypto projects lack purposeful utility and business use cases. Hence, the use cases of the AI-tokens appear unnatural and forced.
In fact, experts also believe that, despite the exciting rise in the price of AI tokens, such incidents can impact investors who enter the market at peak valuations.
SwissOne Capital, a crypto-focused asset manager, states that the world is awakening to productive enhancements of technology. He believes that, amidst the rising global debt levels, such an increase in the price of AI tokens and the surging optimism towards AI crypto reflect the popular belief in an open-source environment. Therefore, analyzing SwissOne Capital’s statement, it appears that the positive outlook towards AI coins and the rising price are just the beginning!
Wrapping it Up!
The surge of Nvidia and its impact on the price of AI tokens underscore the capabilities of AI to transform the crypto world! However, despite the potentialities, the use cases of AI must be made real and relevant. The conjectures regarding the sustainability of such a rising value can be put to rest, solely by focusing on the shift towards AI token’s sustainable growth.
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