The first quarter of 2023 has exceeded the expectations of many crypto traders. Bitcoin pushed off from multi-month lows and is gradually regaining its position. However, the growth of the market flagships against the background of the achievements of some lesser-known coins looks rather modest. Among the current champions, the tokens of several AI projects stand out. 

Which have risen in price by 6-8 times, such as SingularityNET (AGIX) and Anchor Neural World (ANW). It would seem that here it is, a gold mine, you can postpone the ETH to BTC swap and focus on these tokens. But on the crypto market, not everything is as simple as we would like.

Triumphal procession of AI

In the summer of 2022, a real boom began in social networks: users began to actively test AI image generators that appeared in public access. The first was OpenAI’s Dall-E Mini, followed by others.

However, these were still flowers compared to the furore that was created in November 2022 by the appearance of ChatGPT, a chatbot optimized for contextual communication using Reinforcement Learning with Human Feedback (RLHF). According to Google Trends, user interest in ChatGPT has been growing steadily since its inception.

Theoretically, the possibilities of using AI are endless. An electronic assistant can be entrusted with part of the bureaucratic procedures, doctors can use its analytical capabilities in diagnosing rare diseases, financial market participants are testing AI in search of effective solutions for trade automation. It is quite possible that in the relatively near future, AI technologies will find their place in most areas of society.

What is the reason for the rapid growth of AI tokens

The development of AI technologies has attracted the attention of investors to tokens associated with AI projects. Some well-known traders claim that these tokens will be the catalyst for the next bull market.

One of the main attractions of these tokens is the innovative blending of blockchain and AI technologies. The SingularityAI (AGIX) project, according to its creators, combines decentralization and privacy, and does not depend on large companies such as OpenAI or Microsoft. However, AI tokens, like other crypto assets, are at risk of increased volatility.

Are blockchain and AI compatible?

However, critics doubt the compatibility of AI and blockchain and believe that over time, interest in AI tokens will subside, and their prices will decrease. First of all, because the search for successful technical solutions will take some time. The process will not be lightning fast, much less smooth. In addition to an innovative idea and its technical implementation, a potentially successful project needs a base in the form of a sustainable business model.

For example, consider the AI Doctor platform and its AIDOC token. The platform offered AI-based real-time health monitoring, disease diagnosis, and personalized treatment recommendations. According to a 2018 Cryptoslate article, it was founded by a group of scientists from Baidu and Microsoft, as well as several top university professors.

The idea sounds great, but something went wrong. The token was listed on the exchange back in September 2022, and Huobi delisted it sometime later. Mention of the project has almost disappeared from the network and it is likely that it ceased to exist.

The cryptocurrency ecosystem has advanced far in recent years. Investors have become more prudent and the community has learned from past mistakes. However, the history of the AIDOC project reminds us that risks exist and it is necessary to remain vigilant. Although AI tokens are in the spotlight today, a three- to four-digit rise in the price of tokens will inevitably give way to a correction.

On the way to successful and effective solutions that will help make life better, there will still be many mistakes. Yes, in the long run, AI tokens can bring huge profits, but identifying viable projects at such an early stage in the development of a new direction is extremely difficult. Before making decisions about investing in particularly high-risk assets, be sure to do your own research.