• AI tokens have seen strong performance in the market recently, with Kambria, SingularityNET, and Graphling Protocol seeing the highest gains at 445%, 322%, and 290%, respectively.
• Of the top 10 performers over the last 30 days, six have seen losses of 90% or more from their peak prices.
• Most of the AI tokens are microcaps, with low market cap valuations, high risk of failure and abandonment, and lack of liquidity.
The AI narrative has been growing stronger in recent weeks, with the release of chatbot ChatGPT capturing the imaginations of people around the world. The capabilities of ChatGPT seem to indicate that Artificial Intelligence (AI) could revolutionize multiple aspects of life. This has been reflected in a strong performance in the AI sector, with some touting AI crypto tokens as the next big thing.
As of January 18, 2021, Kambria, SingularityNET, and Graphling Protocol had the highest gains in the past thirty days, with an increase of 445%, 322%, and 290%, respectively. An analysis of the top ten performers over the last thirty days showed significant drawdowns from all-time highs, with six of the ten tokens losing 90% or more in value from their peak price.
When filtered by market cap, it was found that the AI sector was largely comprised of microcaps. A microcap is a crypto project with a market cap valuation of less than $50 million. With high risk comes high reward, as the upside potential is heightened by capital inflows generating more significant percentage gains on low market caps.
Despite the high risk posed by these microcap tokens, there is still potential for great reward. AI tokens have been gaining traction in the crypto sphere, and as the technology behind them continues to develop, the sector could experience even more growth in the future. Investors should assess the risks before investing in any of these tokens, and understand the potential gains as well as losses that could result from their decisions.