The cryptocurrency market witnessed a shift as artificial intelligence (AI) tokens surged on Thursday, while meme coins like Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: DOGE) experienced a decline.
This trend coincides with an upcoming Nvidia conference where crypto AI projects are expected to be prominently featured. According to CoinMarketCap, AI-linked tokens saw a 13% increase in value over the last 24 hours.
Projects such as Fetch.AI (CRYPTO: FET), Render Network (CRYPTO: RNDR), Sleepless AI (CRYPTO: AI), and SingularityNET (CRYPTO: AGIX) recorded significant token value increases of up to 40%. These projects are known for their diverse applications of AI, ranging from offering virtual companions to creating marketplaces for graphic processing units.
The buzz surrounding these AI tokens is fueled by reports from Lookonchain, indicating that developers of crypto AI projects will be participating in Nvidia’s event scheduled for March 17-21.
The growing interest in AI tokens reflects the anticipation that AI technology will play a pivotal role in driving innovation across the global economy in the foreseeable future.
Indeed, the relationship between AI and blockchain technology is not straightforward, as AI is not typically operable directly on blockchain platforms. However, developments in traditional AI firms such as OpenAI have spurred heightened trading activity in AI tokens. Despite AI’s inability to directly operate on blockchain, traders perceive AI tokens as a proxy investment in the broader AI sector. This increased trading activity is likely driven by the anticipation of AI’s significant role in shaping future technological advancements and its potential to drive innovation across various industries. As a result, AI tokens have become a focal point for investors seeking exposure to the evolving landscape of artificial intelligence.
The enthusiasm for AI tokens has seemingly affected the momentum of meme coins, which had been enjoying a multiweek rally.
Tokens like Dogecoin, Pepecoin (CRYPTO: PEPE), and Dogwifhat (CRYPTO: WIF) had seen significant gains, more than doubling in value following Bitcoin’s brief breach of its all-time highs.
The surge of meme coins, often appealing to retail traders attracted by Bitcoin rallies, was a key factor behind their recent momentum. However, the landscape has shifted, with DOGE, SHIB, and PEPE experiencing a downturn, losing over 15% of their value in the past 24 hours.
Moreover, a decrease in open interest on DOGE-tracked futures by $400 million from record highs since Tuesday suggests a potential withdrawal of investment from the meme coin sector. This shift in sentiment highlights the dynamic nature of the cryptocurrency market and the impact of emerging trends, such as the growing interest in AI tokens, on investor behavior.