Investors are uncertain about the sector's future when analysis reveals a decline in AI cryptocurrency coin searches despite market capitalization growth.
Despite the sector's market worth increasing by 15.76% over the previous week, there has been a significant fall in online searches for AI cryptocurrency coins.
AI Coin Looks For
Shows that after peaking on February 7, searches worldwide for "AI coins" have been declining ever since. AI crypto queries experienced a sharp surge and decline between February 6 and February 10 according to Google Trends data, which is not real-time and expires on February 16.
The performance of the sector's market does not, however, coincide with the recent fall in search traffic, as projects like The Graph, SingularityNET, Fetch, and Ocean Protocol have witnessed large rises in the last week. Also, since the year's beginning, the AI sector has outpaced the majority of the crypto business.
AI Coin Industry
The Graph (GRT) token, the top coin in the AI industry, saw a price increase of 149% in early February, reaching a local high of $0.21. But as Bitcoin increased toward $25,000, it has now retraced by 27% versus the Dollar and 31% against Bitcoin.
The AI industry as a whole can be inferred from the lack of link between GRT and BTC. After the November release of OpenAI's ChatGPT, interest in AI has increased since the beginning of 2023. The increased interest in AI on a global scale caused the price of AI crypto tokens to soar starting in February.
The price of GRT in BTC rather than USD is displayed in the chart below to visualize the data. The blue and orange lines show the price in dollars of GRT and BTC, respectively.
Coincidence with Bitcoin
Following the local high, GRT started to follow Bitcoin's movement more closely, continuing the customary movement of crypto ventures influenced by Bitcoin's price action. The graph below shows how GRT's growth has lagged behind the price of bitcoin.
A decline in search traffic and a link with Bitcoin suggest that the AI bubble may have burst. This means that projects with strong communities and strong fundamentals will now be challenged against traders' drive to grab profits, since the retail euphoria for AI crypto projects may be coming to an end.
In Contrast to Metaverse Pump
Similar price changes happened after Facebook changed its name to Meta in November 2021. Before the enthusiasm went down and the hype for metaverse-related projects like The Sandbox (SAND) peaked at 998% in less than 30 days, the token gradually sank and fell more in accordance with Bitcoin's price swings.
SAND tokens, the native token of Sanbox, were worth about $0.73 before Meta announced its rebranding. However, as of the time of publication, SAND is trading back around $0.84, up just 15% following a gradual 90% drop.
What Comes After AI Crypto Now?
While the metaverse pump of 2021 is being compared to the euphoria surrounding AI crypto projects, most AI projects are still far from their all-time highs. In contrast, the metaverse pump sent every significant metaverse token to previously unheard-of heights. For instance, the top 10 crypto AI projects are all at least 72% lower than they were at their peak, with some falling as far as 94%.
As a result, even though the early buzz around AI crypto currencies may be passed, the industry is far from dying; rather, the signal may have simply been distinguished from the noise.