According to CoinDesk, cryptocurrencies associated with artificial intelligence (AI) have seen a significant drop of over 20% in the past week. This decline coincides with a peak in public interest in AI, as indicated by Google Trends. Historically, major market tops have been accompanied by spikes in crypto-related Google search queries, a pattern that seems to be repeating with AI-related tokens.
AI-related coins such as FET, RNDR, TAO, and GRT have experienced a market value decrease of up to 30% in the past week, as per data from Coingecko. This decline comes at a time when Google Trends shows that search interest in AI has potentially reached its peak. FET, in particular, is the fourth-worst performing of the top 100 cryptocurrencies over the past week. In comparison, market leader Bitcoin is down by only 2.8% during the same period, while the broader crypto market, as measured by the CoinDesk 20 Index (CD20), has lost 6%.
Google Trends, a tool often used to measure general or retail investor interest in trending topics, shows that the value for the search query 'AI' over the past 12 months reached a peak of 100 last week. This score represents peak popularity, indicating that interest in AI has hit mainstream levels. An increasing number of existing and potential retail investors are seeking information about AI and Nasdaq-listed chipmaker Nvidia (NVDA), a key player in the AI sector.
While this tool is only indicative, it can serve as a useful indicator, as retail investors are often driven by emotions and are usually the last to enter a bull market and the first to exit a bear market. For example, spikes in searches for Bitcoin and Solana's SOL coincided with their respective price tops in May 2021 and November 2021.
It's important to note that Bitcoin, which is known to have a strong positive correlation with NVDA, bottomed out with technology stocks in late 2022 following the debut of ChatGPT, which raised general awareness about AI. According to Jeremy Grantham, Chief Investment Strategist at GMO, the AI rally could represent a potential bubble within a bubble that may soon deflate. This insight could prompt caution among those considering investment decisions.
