The recent shift of investors towards artificial intelligence might dampen the returns from major cryptocurrencies such as Bitcoin and Ethereum, a recent report suggests.
What Happened: The stock market now regards every piece of AI news as bullish, and in light of the resulting FOMO, “crypto has lost its charm,” The Block reported quoting BIT Mining Chief Economist Youwei Yang.
“There is only a certain amount of hot money in the market and it is devoted to AI now, until crypto can breakout some convincing narrative or constructive advancement, in the meantime, crypto will just be trading sideways waiting for major market shocks,” Yang told The Block.
Why It Matters: The bearish projection comes in contrast to senior research analyst Juan Leon’s win-win scenario, who predicted that the intersection of AI and cryptocurrency could add a combined $20 trillion to the global GDP by 2030.
Leon highlighted how Bitcoin BTC/USD miners, equipped to process and store large amounts of data, are stepping in to fill the global shortage of data centers. AI cloud provider CoreWeave recently offered to acquire Bitcoin miner Core Scientific for $1.6 billion, following a $3.5 billion deal to host AI services in its data centers.
Price Action: At the time of writing, AI-related cryptocurrencies had a market cap in excess of $26 billion, according to CoinGecko. Leading the chart were NEAR Protocol NEAR/USD, Fetch.ai FET/USD, and Render RNDR, with total valuation of $5.2 billion, $3 billion, and $2.8 billion respectively.
Read Next: Is $0.10 Really Dogecoin’s ‘Next Stop’?
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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