Another AI update, another pump.

OpenAI, the U.S. startup behind the mega popular ChatGPT app, released a new version of its software allegedly 1,000 times more sophisticated than previous iterations.

The biggest improvement is in the software's search capabilities, which will now accept images along with text input. The release of OpenAI's first Chat-GPT version last November gave birth to the market's AI narrative.

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Since then, various AI crypto tokens have soared significantly thanks to market hype.

IntoTheBlock analyst Juan Pellicer told Decrypt that “it’s clear that the new narrative in tech is AI, and these coins are benefiting tremendously.”

He added that this can be seen when examining the token backing SingularityNET (AGIX), which is trading “with lower levels of correlation compared to the rest of the crypto market.”

A chart showing various AI tokens correlation with other tokens.
IntoTheBlock correlation matrix with rest of crypto market. Image: IntoTheBlock.

Amid the latest GPT update, CoinGecko's data shows the gains in AI-powered tokens were far higher than the rest of the market.

SingularityNET's AGIX shot up 25% overnight, while others like Fetch.ai (FET), Ocean Protocol (OCEAN), and Numeraire (NMR) also recorded double-digit gains.

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Most AI tokens are ‘grifts’

However, experts have raised concerns that the gains could be highly speculative.

CoinGecko’s head of research Zhong Yang Chan told Decrypt that “the current wave of investment in AI crypto is likely driven more by speculation than by fundamentals. Beyond the initial hype, investors and builders should focus on meaningful use cases that combine AI and blockchain.”

Delphi Digital’s VP of research Aswhath Balakrishnan echoed this sentiment, telling Decrypt that most AI tokens are “grifts” with “very few projects in the space trying to thoughtfully integrate AI into crypto.”

Nansen’s data for AGIX, FET, and OCEAN tokens shows no significant buying activity by wallets tagged as “smart money.” These wallets are identified by the Ethereum analytics firm as the most active and well-informed.

A sustainable rise in a token’s price is usually built after accumulation by smart money, which is absent from the current rally.

Green and purple lines moving through a chart.
Smart money balance and number of wallets holding AGIX token. Source: Nansen.

It’s not just mercurial investors turning to the new tech trend.

Elon Musk also appears to be shifting his focus from dog memes coins to the AI hype.

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The billionaire entrepreneur posted two tweets this morning mocking the rise of AI technology. The first was a sadistic approach to machines taking over the planet, while the second hinted at the potential exploits of the porn industry.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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