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With Bitcoin reaching a new ATH (all-time high) in March 2024, the crypto market has truly entered a bullish cycle.
The SEC’s approval of Bitcoin ETFs, growing interest from institutional investors and regulatory clarity have pushed BTC over 150% since last year.
Yet, Bitcoin’s rally in this bull market is largely overshadowed by the remarkable growth of AI-based tokens.
Data from CoinMarketCap shows that AI tokens currently hold a market cap of $41.5 billion, with some of the major tokens recording 10 times the growth of Bitcoin in the past year.
So, why are AI (artificial intelligence) tokens suddenly the crypto market’s new favorites? And which tokens are potentially winning this bull market?
Analyzing the rapid rally of AI tokens
AI tokens first took off in early 2023 after ChatGPT launched the GPT-4 module, marking a new era in generative AI advancements.
Throughout 2023, such tokens saw gradually growing interest from traders, with more industry giants like Microsoft and Google launching their own AI initiatives and development plans.
The idea that AI is truly the building block of all future technologies is becoming evident through these industry initiatives.
So, naturally, as the crypto industry is always reactive to significant technological advancements, the interest in such tokens grew consistently throughout the year.
However, trading interests in AI tokens saw parabolic growth in January 2024, driven by several factors.
The launch of OpenAI’s Sora, a text-to-video model, showcased AI’s truly next-gen capabilities.
At the same time, OpenAI’s rival, Anthropic, received nearly $3 billion in investment in its latest funding round.
These developments saw interest in AI tokens increase dramatically, with trading volume across various exchanges surging over 400%.
Nvidia also reported its fourth-quarter earnings in February 2024 that exceeded expectations, with earnings per share and revenue surpassing Wall Street’s predictions.
Nvidia’s success is a barometer for the tech industry at large, particularly for sectors involved with AI and machine learning.
The company’s strong performance can signal robust health and innovation in these areas, which directly benefits AI-related tokens in the crypto market.
Another key factor was Vitalik Buterin’s endorsement of AI as the future of blockchain security.
The Ethereum co-founder suggested we can leverage AI technology to improve code audits and reduce bugs in blockchain projects, which will go a long way in solving the cybersecurity crisis in the crypto industry.
These factors cumulatively drove such tokens to outperform leading cryptocurrencies such as Bitcoin and Ethereum.
AI tokens to watch closely in 2024
There were evident winners in this AI bull run, with some tokens outperforming market expectations.
Worldcoin (WLD) has undeniably led this rally of AI tokens, increasing nearly 790% since its launch in September 2023, just seven months ago.
Being a venture of OpenAI’s CEO Sam Altman, Worldcoin significantly benefited from the hype around Sora. The token reached an ATH in early March 2024.
However, the token has faced severe backlash from regulators worldwide. A key feature of the project is scanning users’ eyeballs and providing tokens in exchange for biometric data.
This has raised privacy concerns in several countries, including Portugal and Spain.
Despite the increased scrutiny, user interest in WLD has remained steady, which potentially reflects the token’s resilience to regulatory challenges.
Another potential AI token to watch is Render (RNDR), which has increased by over 800% in a year.
The project has announced major developments in recent weeks the most recent being a proposal to build 3D datasets for next-gen AI applications.
SingularityNet, Fetch.ai and Ocean Protocol could also be some of the most exciting ventures to watch in the AI space. All of these tokens have individually recorded nearly 100% gains since January 2024.
Recent reports suggest that the three tokens are potentially discussing a merger to emphasize collective efforts in developing blockchain-based decentralized AI protocols.
Such initiatives could see these tokens continue to perform positively throughout the bull market. It’s evident that AI tokens are the new favorite of the crypto market and for all the right reasons.
Such projects are bringing a new era of scalability, security and interoperability to the industry that would collectively benefit all cryptocurrency projects and platforms.
However, it’s important to note the inherent volatility risks in the crypto market.
Just as interest in AI tokens saw a parabolic growth in recent months, it could decline due to regulatory decisions or other external factors.
So, it’s always important to remain vigilant and consider your risk appetite before diving into such ventures.
Yely Kopan is a PR advisor and director of public relations at INPUT Communications Agency. She is a former data analyst, journalist, TV show scriptwriter, marketer and PR for media who turned to become a publicist.
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