The Rise and Fall of AI Tokens: Worldcoin (WLD) Takes the Spotlight
Date: 2023-09-11 Author: Dima Zakharov Categories: CRYPTO PAYMENTS
In the ever-evolving world of cryptocurrencies, trends and popularity can change in the blink of an eye. Lately, the spotlight has been on Worldcoin (WLD) and its connection to artificial intelligence (AI) tokens. However, despite the initial hype, the AI token market has faced stagnation, leaving investors and analysts puzzled.
The Hype and Hope
According to data from Kaiko, a cryptocurrency analytics firm, AI tokens saw a steady increase in trading volume during the last month of summer. From late July to the end of August, the trading volume surged from $570 million to $870 million. This surge created a buzz in the cryptocurrency community, with many anticipating a bright future for AI tokens.
Desislava Yaneva, an analyst at Kaiko, pointed out that the dip in AI token popularity in July was largely due to negative sentiments prevailing in the cryptocurrency market. Additionally, the overall open interest in the top five AI tokens, excluding WLD, plummeted nearly threefold, going from $170 million in February to $60 million in August.
Worldcoin Holders Left Disheartened
In early September, analysts at IntoTheBlock made a startling discovery. About 90% of Worldcoin (WLD) holders had incurred losses due to the token's declining price. To make matters worse, the number of active Worldcoin wallets dropped by a staggering 94% from 2,270 to 137 between July 24th and August 31st. Simultaneously, the count of new addresses plummeted by 98%, falling from 2,260 addresses created on the day of the token's launch to just 50 by August 31st.
This massive reduction in user activity aligns with regulatory concerns regarding data privacy and the lack of clear incentives and utility for the Worldcoin project.
AI Tokens Lose Traders' Interest
The emergence of ChatGPT, an AI-based chatbot by OpenAI, in November 2022 triggered a surge in AI-related products and cryptocurrencies. However, by late July, Kaiko analysts noticed the lowest trading volumes for AI tokens since the beginning of the year. Data for six prominent AI tokens with the highest market capitalization—The Graph (GRT), Render (RNDR), Injective (INJ), Oasis Network (ROSE), SingularityNET (AGIX), and Fetch.ai (FET)—indicated that their trading volumes had dropped to levels unseen since January.
The enthusiasm that once surrounded AI tokens now seems to be dissipating, raising questions about the long-term viability of these projects in the crypto space.
