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AI-Linked Cryptocurrencies Navigate a Bearish Week

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In recent times, the cryptocurrency market’s vibrant energy has been hard to miss, especially for tokens linked with burgeoning technologies like artificial intelligence (AI).

But this past week painted a different picture for AI-based cryptos. Notable players in this niche, such as The Graph, Ocean Protocol, and SingularityNET, registered significant declines. These AI-tied tokens navigated more challenging terrain in a week where much of the overall crypto market maintained a steady course.

AI-Linked Cryptos Navigate a Bearish Week as the Overall Market Draws Down

AI-Linked Cryptos Navigate a Bearish Week as the Overall Market Draws Down

Cryptocurrency market, Source: Coin 360

Microsoft’s missteps with AI

One can’t help but look at the broader landscape to understand these crypto declines. According to a Wall Street Journal report, Microsoft, a global tech powerhouse and a significant backer of AI technologies, has reportedly faced challenges with its generative AI offerings.

Despite their collaboration with OpenAI, the creators of ChatGPT, Microsoft’s venture hasn’t been as profitable as expected. The Wall Street Journal reports indicate that Microsoft’s AI offerings have been draining the company’s resources at $20 to $80 per user each month. Until a decrease in computing costs occurs, the tech giant might need to reconsider its pricing strategy for future AI software.

Tokens under turbulence

While traditional financial players face AI challenges, the crypto realm hasn’t been spared. The Graph (GRT) leads the pack in decline, with a 7-day dip of 9.93%. Ocean Protocol (OCEAN) is not far behind, registering a 13.32% decline, and SingularityNET (AGIX) fell by 9.6% over the past week.

Another noteworthy mention is ARKM, the native token for the blockchain analytics firm Arkham Intelligence. It saw the most significant plunge, dropping over 20% in just a week. Since its launch earlier this year, ARKM has yet to deliver on its promise, with its current trading price far from its initial launch price.

The bigger picture

The meteoric rise of OpenAI’s ChatGPT last year ushered in a wave of excitement and investment in the AI sector. Tech giants like Google’s Alphabet and China’s Baidu are already gearing up to launch their chatbot contenders. However, while heavyweights like Microsoft, Google, and Baidu may have the resources to navigate this volatile landscape, smaller players and investors hunting for the next big thing in AI might need to brace themselves.

Barron’s recent commentary suggested caution, hinting that the current feeding frenzy around AI might not have a pleasant end. Despite the allure of AI and its integration with blockchain, the market’s recent shifts suggest that this territory remains unpredictable.

Broader market movements

Aside from AI-specific tokens, the broader crypto market has experienced a whirlwind of activity. Bitcoin, the crypto torchbearer, has surged by 39% in the yearly timeframe, with many altcoins also riding the uptrend. However, the AI-linked tokens have conspicuously underperformed despite this market bullishness.

The complex interplay of AI and cryptocurrency remains a developing story. While AI promises transformative solutions across industries, its amalgamation with crypto assets adds layers of volatility and unpredictability. Thus, investors and stakeholders must tread this landscape with excitement and caution, recognizing that today’s technology darlings might face challenges tomorrow. The current downtrend of AI-linked cryptos is a timely reminder that in technology and finance, not everything that shines is gold.

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