- Big Tech stocks led a mass sell-off event on Tuesday.
- AI leader Nvidia shed over $250 billion of its market cap.
- However, the slump won’t stop AI-crypto projects from growing, experts say.
Crypto-linked artificial intelligence projects will brush off market wobbles to soar beyond their$25 billion market.
That’s according to Alice Liu, research lead at CoinMarketCap, who told DL News that the market segment still “has a lot of room for growth.”
Chipmaker Nvidia led a sell off in tech stocks on Tuesday that wiped $250 billion from its market capitalisation, renewing fears that the buzz around AI is a bubble waiting to pop.
“I wouldn’t call this a bubble,” she said.
Nvidia’s stock plunge “doesn’t undermine the progress made in AI projects,” Liu added.
The future of the sector depends on projects’ ability to identify “real use cases and utility of crypto/blockchain in the AI space, rather than treating it as meme-fied concepts.”
Bolstered by estimates that the combined power of crypto and AI may add $20 trillion to the global economy by 2030, investors have injected over $750 million into the sector this year.
AI-crypto projects riding the wave of interest in the AI sector are up almost sixfold over the past year. The two top cryptocurrencies, Bitcoin and Ether, are up 103% and 46%, respectively.
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“There will be a tonne of AI and crypto opportunities,” Cosmo Jiang, portfolio manager at Pantera Capital, told DL News in an interview this summer. The hedge fund will invest north of $200 million into the intersection of AI and blockchain until 2030.
Bitcoin miners have diversified by leasing out processing power to generative AI developers. While VanEck has championed the strategy and said it can result in $14 billion in profits, others have accused the miners of taking their eyes off the ball.
Blockchains could also enable developers to better verify data, and provide decentralised tools to train large language models.
Le Shi, head of trading at crypto trading firm Auros, says the future success of the market will depend on VC-backed startups’ performance, and macro factors like the upcoming US election.
“These projects, combined with favourable macro conditions, will likely set the stage for a more conducive environment for AI-powered crypto solutions,” Shi told DL News.
Crypto market movers
- Bitcoin has fallen 3.4% over the last 24 hours to $56,144.
- Ethereum has fallen 3% over the same period to $2,377.
What we are reading
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
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