Is AI crypto the new millionaire maker?

Interest in AI crypto has gained pace due to the extensive use of artificial intelligence chatbots such as ChatGPT.

Launched in November 2022, the extensive use of ChatGPT, a tool developed by OpenAI, has contributed to a spotlight being shone on AI-backed cryptocurrencies.

In the markets, AI crypto has now joined established coins, Metaverse tokens, memecoins, and all the other digital assets.

It is difficult to navigate crypto price tracking portals such as Coinranking, TradingView, CoinMarketCap, and CoinGecko without coming across AI tokens.

While the cryptocurrency market has struggled for much of the past year, the potential of AI, expected to reach into sectors including information technology, healthcare, marketing, finance, transport, customer service, and entertainment, has seen tokens supported by companies under the AI umbrella perform above expectations.

Let us examine AI crypto and its potential impact on the investment portfolios of millions of traders across the globe.

AI crypto: What is it?

AI crypto comprises both coins and tokens. You may have come across these terms on crypto portals and seen them being used interchangeably. In fact, coins and tokens refer to two different things. 

Coins are native to a single blockchain. This means that aside from performing utility services on that chain, it cannot function on any other chain due to a lack of interoperability.

Tokens are deployed on existing blockchains and rely primarily on the possibilities of smart contract chains to function.

AI crypto involves both coins and tokens developed by groups of people to fuel AI-based services, applications, and projects such as AI-driven DAOs (decentralized autonomous organizations), AI-powered trading algorithms, and decentralized AI marketplaces.

AI coins normally play the basic role of a transactional currency, where they are used as payments, while AI tokens do this as well as conferring governance rights to the virtual asset's holders.

The impact of AI cryptos in the market 

As of 14:00 UTC on 9 August, 2023, cryptocurrencies under the artificial intelligence banner commanded a market capitalization of approximately $4.7 billion. 

While many of the mainstream digital currencies such as Cardano (ADA), Litecoin (LTC), Solana (SOL), Polygon (MATIC), and others have failed to bring multiple percentage gains to traders in the first eight months of the year, many AI coins and tokens have performed extremely well. 

Among them is AGIX, the novel token of SingularityNET, a platform powered by blockchain technology that allows people to not only create and share but also monetize services related to the booming AI industry.

AGIX has brought more than 300% gains year-to-date (YTD). It was among the best-performing coins in the first two months of the year (January to February), when it soared by 1,357% in 39 days. 

AGIX opened on 1 January at $0.04556 and reached a year high of $0.6637 on 8 February on the back of a partnership with Cardano that enhanced applications for developers on the protocol.    

Another is FET, the token behind Fetch.ai, a platform that functions as an AI laboratory building permissionless, decentralized, and open machine learning networks within the decentralized finance economy.

FET has spiked by 120% YTD and token holders from the opening day ($0.09166) of the year to 8 February saw a 555% increment in their investment capital when it reached a peak of $0.6004.

One of the less-popular but top-performing tokens so far has been KAT, the cryptocurrency behind Kambria, an open platform for augmented reality (AR), the Internet of Things (IoT), virtual reality (VR), blockchain, robotics, and artificial intelligence.

KAT investors who bought and sold the token around February, during the AI token rally, came away with almost 2,000% gains in less than two months.

Other digital assets that have made substantial contributions to the category’s impressive market capitalization include but are not limited to, Akash Network (AKASH), Image Generator Token (IMGNAI), CryptoGPT (GPT), and VAIOT with double-percentage gains in 2023.  

Should you invest in any AI crypto? 

Yes, AI cryptos are assets you should consider adding to your investment portfolios. 

While AI has been trending on social media platforms over the past eight months due to its positive and negative sides, the foray of companies such as IBM and Slack into using it to improve their services gives credence to the technology.

The launch of AI tools has improved the stock prices of companies such as Meta Platforms Inc. (META), Apple (AAPL), and Microsoft (MSFT). 

In the same way, the launch of AI products by companies under DeFi support will reflect positively on the values of AI coins and tokens.