Coinbase warned crypto investors to remain aware of the AI-focused crypto tokens amid this bull run.
Artificial intelligence (AI) focussed companies across the world grabbed huge popularity in the last two years. The trade price of the majority of the AI-linked stock assets surged rapidly by multiple folds. Similar effects are also visible in the crypto sector. Even small AI focussed crypto tokens showed a high rally e.g. FET, WLD, AKT, etc.
David Han, a research analyst at Nasdaq-listed American crypto exchange Coinbase, pointed out that the recent increase in AI token prices may be driven more by hype rather than genuine utility or usage.
According to available data at coin tracking platform Coingecko, the current valuation of AI crypto tokens is nearly $28.6 billion.
Notably 30% increment in this valuation took place in a single day and this shows a very big trend of AI tokens. So there are huge chance that all these tokens will face a very high level of correction when the market once will moves toward downfall.
Coinbase’s report noted that all such tokens are taking advantage of crypto bull sentiments as well as AI trends simultaneously.
The report also noted that all such projects are talking about their AI tools more than what they are. That means AI crypto projects are currently overhyped projects.
These cryptocurrencies may lack sustainable demand drivers in the short to medium term and it may result in a very big downfall.
Recently the Ethereum co-founder Vitalik Buterin also shared his opinion on the surging popularity of AI-focused crypto projects.
Vitalik said that AI technology can be used for the Ethereum blockchain to find code bugs, which is probably a very big challenge for Ethereum.
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