According to CoinDesk, artificial intelligence (AI) crypto tokens are struggling to meet their ambitious 2024 targets, despite recent optimism in AI stocks following Nvidia's (NVDA) conference. Last March, the NEAR token experienced a significant surge, doubling in value ahead of Nvidia's annual event, a trend mirrored by other AI tokens like Fetch.AI (FET), The Graph (GRT), and SingularityNET (AGIX). However, this year, AI tokens have demonstrated vulnerability, with NEAR dropping over 8% in the past 24 hours and FET declining nearly 9%. In contrast, Nvidia's stock began the year at $133 and increased by 15% to $153 as the conference commenced.
Several factors contribute to the waning interest in AI tokens. One significant reason is the rise of AI agent tokens, which resemble memecoins due to their volatility and dedicated followings. These tokens attract investors seeking substantial gains, sometimes in triple or quadruple digits, unlike traditional AI tokens with larger market caps that are harder to move. However, like memecoins, AI agent tokens also pose a risk of significant losses. Additionally, there is a noticeable decline in interest, as evidenced by Google search trends showing a 47% drop in searches for "NEAR token" and an 84% decrease for "Fetch.ai" since March.
The decline in AI tokens is not unexpected, given the crypto market's tendency to penalize sectors that rise rapidly in a speculative manner. Last year's rally was driven by the belief that AI tokens would dominate the crypto bull market narrative. Instead, Bitcoin took center stage, attracting tens of billions of dollars in ETF inflows and positive sentiment surrounding Donald Trump's presidential victory. Despite these challenges, AI tokens remain in their early stages, with few projects achieving mainstream use as many products are still under development. Meanwhile, Nvidia has announced the release of a $3,000 mini supercomputer called Digits, set to be available for purchase in May.
