Online searches for AI cryptocoins have fallen by more than 64% over the past seven days, while the sector’s market cap has risen by 15.76% over the same period. crypto slate data.
AI coin search down
proprietary data from crypto slate It also shows that global searches for AI crypto for “AI coin” continue to decline following its February 7 peak. Data from Google Trends ending Feb. 16, not in real time, shows sharp ups and downs in AI. Crypto Search from February 6th to February 10th.
However, recent declines in search traffic do not correlate with market performance in this area, as projects such as The Graph, SingularityNET, Fetch, and Ocean Protocol have seen significant increases over the past week. Additionally, the AI sector has outperformed most of the cryptocurrency industry since the beginning of the year.
AI coin sector
The price of The Graph (GRT) token, the leading AI sector coin, surged 149% in early February to reach a local high of $0.21. However, as Bitcoin rose towards $25,000, it fell 27% against the dollar and 31% against Bitcoin.
The lack of correlation between GRT and BTC is indicative of the AI sector as a whole. Since the beginning of 2023, interest in AI has exploded since OpenAI’s ChatGPT was launched in November. Global attention to AI has led to a spike in the price of AI crypto tokens since the beginning of February.
The chart below visualizes the data by showing the price of GRT denominated in BTC instead of USD. The blue and orange lines represent GRT and BTC prices in dollars, respectively.
Correlation with Bitcoin
Following local highs, GRT is starting to move in line with Bitcoin, consistent with typical moves for crypto projects triggered by Bitcoin price action. The chart below tracks the lagging growth of blue GRT relative to Bitcoin price.
A correlation with Bitcoin and a decline in search traffic indicate that the AI bubble may have burst. As a result, the retail hype for AI crypto projects may come to an end. This means that a project with a strong community and strong fundamentals will be tested against traders’ desire for profit.
Comparison with metaverse pump
Similar price movements occurred after Facebook rebranded to Meta in November 2021. Metaverse-related projects such as The Sandbox (SAND) saw him surge 998% within 30 days before the hype died down, and the token slowly fell, falling in line with Bitcoin’s price volatility. . .
Prior to the Meta rebranding announcement, Sanbox’s native token, the SAND token, was worth around $0.73. However, at the time of writing, SAND is trading around $0.84, up just 15% after a modest 90% decline.
What’s Next for AI Crypto?
The hype surrounding AI crypto projects is reminiscent of the 2021 metaverse pump, but most AI projects are still well below all-time highs. For example, the top 10 crypto AI projects all dropped at least 72% at their peak, with some dropping as low as 94%, while the Metaverse Pump lifted all major Metaverse tokens to unprecedented heights. rice field.
So while the initial hype for AI cryptocoins may be over, the sector may not be dead, the signal may just have been separated from the noise.