Coinspeaker
AI Coins Slump as Google Trends Reveal Peak Retail Investor Interest
Artificial intelligence (AI) linked crypto coins have suffered a major blow with tokens like Fetch.ai (FET), Render (RNDR), Bittensor (TAO), and The Graph (GRT) having dropped by up to 30% in value over the past week, according to CoinGecko.
This fall comes amidst a rise in retail investor interest as indicated by the peak of the Google search on “AI”.
Surge in Retail Interest
Data from Google Trends indicates that search interest for “AI” reached its highest point in the last five years last week, achieving a peak score of 100. The surge indicates that AI has attracted widespread attention from many retail investors who want to find out more about AI technologies and companies such as Nvidia Corp (NASDAQ: NVDA).
Historically, search spikes have occurred at or around big market tops, aligning with legendary investor Warren Buffet’s advice to buy low and sell high. The current focus on AI cryptocurrencies shows that it could be following this pattern, meaning that an influx of retail buyers may have contributed towards falls recently seen within these currencies.
Market Trends and Comparisons
The increase in retail interest mirrors previous trends seen with other cryptocurrencies. For example, search spikes for Bitcoin and Solana (SOL) corresponded with their respective price peaks in May 2021 and November 2021. This pattern suggests that retail investors often enter the market at high points, leading to rapid declines once the initial interest diminishes.
Jeremy Grantham, Chief Investment Strategist at GMO, has warned that the AI rally could be a “bubble within a bubble,” suggesting that the heightened enthusiasm might not be sustainable in the long run. This viewpoint is supported by the recent downturn in AI token values, despite the ongoing interest in AI technologies.
Buy the Dip or Local Top?
Despite the current dynamics, investors are questioning whether this is a temporary buying opportunity or a signal of a local top.
While historical trends suggest retail investor interest often peaks at market tops, the underlying potential of AI could mean that this dip presents a strategic entry point for long-term gains. As with any investment, cautious optimism and thorough research are essential.
Decoding the AI Hype
AI tokens, which use artificial intelligence to enhance their services, have earlier seen significant growth. With over 80 AI tokens available, market capitalization rose from under $10 billion in February to $25 billion in June, highlighting rapid investor interest.
Web2 AI companies like NVIDIA have reached incredible milestones, and AI enthusiasts in the crypto space anticipate that the same success will trickle into blockchain AI projects.
Although still in the early stages, AI’s future impact on tech is expected to be huge, drawing keen interest from investors and tech enthusiasts.
AI Coins Slump as Google Trends Reveal Peak Retail Investor Interest
