Artificial intelligence (AI) crypto tokens are riding a wave of interest that started with the release of the chatbot ChatGPT, capturing the imagination of people around the world.
ChatGPT’s obvious features demonstrate AI’s potential to revolutionize many aspects of life. As such, some are touting AI crypto tokens as the next big thing.
This is reflected in the strong performance of the AI sector. As of January 18, the top three risers over the last 30 days are Kambria, SingularityNET, and Graphing Protocol, growing by 445%, 322%, and 290%, respectively.
An analysis of the top 10 stocks over the past 30 days shows significant declines from all-time highs, with 6 out of 10 stocks losing more than 90% of their value from their peak prices.
AI tokens are mostly micro-capped
In the list above, 8 out of 10 are micro caps, which typically equate to untested proofs of concept, high risk of failure/abandonment, and lack of liquidity.Microcap is a crypto project for $50 million In market capitalization valuation.
However, on the spin side, high risk comes with high reward. Capital inflows increase the upside potential and generate larger percentage gains at lower market caps.
Filtering the data by market capitalization reveals that the entire AI sector, with the exception of the top seven, is made up of micro-cap products.The market capitalization of the top 7 AI projects is valued at billion dollarsmake them small caps.
The AI sector is underdeveloped and underinvested, and the leading AI token, SingularityNet, currently ranks as the 118th largest crypto project by market capitalization.
So the recent very high percentage increase within the AI sector is more exaggerated than the increase in large caps in terms of actual inflows.
Top 5 AI tokens by market capitalization
That said, many are eyeing AI as the next boom sector, leading to a speculative frenzy from early entrants.
As expected, all of the top five AI tokens have lost significant value over the last year. iExec RLC performed best during the period with a drawdown of 59%. But with a strong start to 2023, SingularityNet is ahead of the pack with a 360% year-to-date increase.
AGIX started 2022 at $0.2026 and ended 2022 at $0.0464. This corresponds to a loss of 77% in value over the period. Since then, the token has risen significantly in 2023, peaking at $0.2581 on January 14, a YTD gain of 365%.
The FET opened 2022 trading at $0.5029 and ended 2022 at $0.0916. This corresponds to a loss of 82% in value over the period. Since the beginning of the new year, FET has recorded a sharp rise, peaking at $0.2986 on Jan. 18, and YTD he’s up 203%.
OCEAN opened 2022 trading at $0.8523 and ended 2022 at $0.1630. This corresponds to a loss of 81% in value over the period. 2023 started with strong moves testing resistance at the $0.2995 zone on Jan 14 and Jan 17. YTD up at 67%.
The RLC opens 2022 at $2.957 and closes at $1.221, representing a 59% loss in value over the period. With a solid start to the new year, RLC saw him hit a local top of $1.883 on Jan. 15, giving up most of the gains in subsequent days. YTD growth rate is 32%.
NMR started 2022 at $31.49 and ended the year at $12.29. This corresponds to a loss of 61% in value over the period. The token hit $17.76 on Jan. 14, marking his 31% rise in YTD.