What are AI tokens and should you buy some?
AI tokens have been trending over the past eight months due to the impact artificial intelligence products have had on global markets.
While AI has been well-received by many companies in the entertainment industry, many actors and screenwriters have expressed dissatisfaction, culminating in strikes in July.
Despite the threat AI poses, it has many advantages that can simplify the nature of work. The crypto market has been trading far below the all-time lows of 2021, but the addition of assets powered by AI companies has led to a significant rebound.
Let us examine what they are and the impact they continue to have on the DeFi (decentralized finance) sector.
What are AI tokens?
Derived from a combination of cryptocurrency and AI, they play an integral role in driving user experience, scalability, security, and many factors in the growing artificial intelligence sector.
Due to being housed in blockchain, the possibilities of this technology enable people to use virtual assets to pay for AI-related services.
Some of these services include payment for the use of image generation or text generation tools, exchanges, or decentralized marketplaces.
Some of them also play an invaluable role in the creation of several virtual platforms where people can buy and sell AI algorithms.
What is the market size for AI tokens?
The market size for the AI industry was estimated to be worth around $137 billion in 2022. It was forecast to grow at a CAGR (compound annual growth rate) of 37.3% over the next seven years (2023 to 2030), according to Grand View Research.
Areas expected to contribute significantly to achieving this valuation include but are not limited to manufacturing, agriculture, advertising and media, retail, law, healthcare, and automotive & transportation.
Some companies named in the research included AMD (Advanced Micro Devices), Baidu Inc., Google LLC, IBM (International Business Machine Corporation), Intel Corporation, NVIDIA Corporation, Microsoft, Zebra Medical Vision Inc., and Sensely Inc.
Germany, the UK, China, Japan, India, the US, Canada, and Mexico were the countries named to lead this revolution.
AI tokens are typically assessed with big data cryptocurrencies due to the similar roles they continue to play in the Web3 revolution.
As of 14 August, there are more than 1.6 million cryptocurrencies on the market. The overall total market capitalization of the digital currency sector stood at approximately $1.2 trillion.
Out of this, around $4.9 billion belongs to the big data and AI market. This represents around 0.4% of the entire crypto economy.
This shows the amount of work the aforementioned companies must do to be able to compete squarely with other asset classes such as memecoins which has been soaring with price spikes in Dogecoin (DOGE), Pepe Token (PEPE), Shiba Inu (SHIB), and Floki Inu (FLOKI).
## What AI tokens can you consider?
While AI has faced ire from regulators across the globe, its assets remain some of the most in demand.
As with crypto, regulatory bodies in the world's most powerful economies are trying to come up with AI compliance measures so that the privacy and security of their residents would not be compromised.
While the market remains highly competitive with Google, OpenAI, and a few others dominating, the lack of awareness and education on the part of traders may see millions make severe losses within a short period.
SingularityNET (AGIX), Fetch.ai (FET), Akash Network (AKT), Image Generation (IMGNAI), Kambria (KAT), and CryptoGPT (GPT) are among some of the cryptocurrencies under the AI banner you can consider for your portfolio.
One of the advantages of owning AI tokens is that more than 90% of them are changing hands below $1.
This means you do not need to fork out a lot of money before you can get your hands on millions of crypto tokens. With $1,000, you could have millions of GPT, KAT, IMGNAI, FET, AKT, and AGIX tokens in your investment portfolio.
Many analysts continue to preach diversification and mixing AI tokens with Metaverse tokens, memecoins, and coins with sizable prices could be the way to go under the current crypto climate.
The laws of cryptocurrency trading apply to all tokens, including those related to AI.
Without strong fundamental and technical analysis, you could end up like many traders who felt they had found the next golden goose, only to lose substantial sums in a short period.
Know that digital asset investment is risky, so invest what you can afford to lose.
Author: Raphael Minter
Raphael Minter/ Albert Zuhnden (preferred pen name) is a crypto finance writer, data miner, and fundamental analyst. Raphael has written hundreds of articles about centralized and decentralized financial instruments such as precious metals, commodities, stocks, and cryptocurrencies. He broke into digital finance in 2016 and believes digital assets and blockchain technology is the future of finance.