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Market analysis: how are AI tokens performing?
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2023 was an exceptional year for tokens closely or remotely related to AI, propelled by the launch of ChatGPT and other generative AI applications. The prices of tokens such as INJ, WLD and ICP exploded, rising by +2700%, +2320% and +238% respectively. However, performance since the start of 2024 has been significantly worse: -25%, +31% and -6% for INJ, WLD and ICP, compared with +50% for Bitcoin.
Injective, for example, is a Cosmos-based blockchain that combines elements of AI and DeFi. Applications (dApps) built on Injective can use AI algorithms to optimise user decisions. The blockchain also describes itself as the first to offer "self-executing smart contracts", which aim to increase efficiency.
The maximum supply of the INJ token is set at 100 million units and all of the tokens are already in circulation. The INJ price has fluctuated around an average of $36 this year, peaking at $52 in March, and has a current market capitalisation of $2.6 billion. Daily volumes frequently exceed the $150 million mark on centralised exchanges, and average market depth at 50 basis points on Binance is well over $1 million. In conclusion, INJ has healthy and consistent levels of liquidity over time.
Another example, WLD (the token of the Wordcoin project co-founded by Sam Altman, the CEO of OpenAI) has exploded since the start of the year, both in price and trading volumes, topping $1 billion on the day of 9 March following the announcement of Sam Altman's return to the OpenAI board, and sending the price towards $12.
More generally, we note that WLD's price fluctuations are very closely linked to announcements around OpenAI.
WLD's performance exceeded 200% over the year in March, before losing momentum and falling to 30% in April, affected by fears of the return of inflation in the US and geopolitical tensions in the Middle East.
Worldcoin's recent worries with the Spanish regulator over the collection of users' private personal data are nothing new. The price of WLD has long been around the $2 mark since its launch in July 2023, pushed down mainly due to similar attacks by regulators around the world, and a lack of adoption. We covered this and other aspects of the Worldcoin project in detail in this article. These same issues of collecting users' personal data could hold back Worldcoin's rise.
Generally speaking, the rapprochement between AI and blockchain technologies has been smooth and natural overall, thanks to the complementary nature of the two: one accelerates use cases, the other secures and keeps track of what is human, or not! Experts believe that AI-linked cryptos could account for up to 30% of the ecosystem's market capitalisation in the very near future.
1 = 16/02/2024: OpenAI launches Sora, a revolutionary AI that generates videos
2 = 01/03/2024: Elon Musk sues OpenAI and Sam Altman for breach of contract
3 = 06/03/2024: Worldcoin ordered to suspend collection of personal data in Spain
4 = 08/03/2024: OpenAI board reinstates Sam Altman and expands
