AI Tokens Prepare for Round 2: Sector Shows 8% Growth

Excluding Bitcoin, memecoins have been the biggest narrative this cycle. However, Artificial Intelligence (AI) tokens also achieved notable results during the first quarter of 2024.

The cryptocurrency market recovered from the May 1 retracement over the weekend, with AI tokens showing significant gains. As a result, many industry experts believe the industry is ready for a “Round 2” in this cycle.

The AI ​​sector recovers by 8%

Crypto analysts have highlighted AI tokens along with memecoins as the hottest topic of 2024, responsible for most of the massive gains during this cycle.

According to CoinGecko relationship, artificial intelligence was one of three sectors that posted triple-digit returns in the first quarter. Additionally, the largest AI token by market capitalization, Fetch.ai (FET), recorded gains of 378.3% during this period.

As a result, some analysts believe the AI ​​sector will be the next major narrative in the cycle. Trader John Walsh, known as CryptoGodJohn, consider “The future of AI coins prepares for round two.”

Walsh added that the AI ​​season is “extremely obvious” and will go “much higher” based on developments in industries, including Nvidia’s earnings, Apple’s AI and $100 billion AI fund Microsoft dollars.

To this, crypto analyst MacroCRG responded that massive growth in AI “will be evident in hindsight,” considering the industry’s market capitalization is “only” $27.3 billion.

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According to a post by MacroCRG, AI’s market capitalization was up 8% on Monday morning and its daily trading volume was around $1.9 billion. On Tuesday, the market capitalization rose to $27.8 billion, up 2.3% from 24 hours ago.

Compared, memecoin Market capitalization of $54.4 billion doubles that of AI. However, its market capitalization declined by 2.8% over the past day, with the top ten memecoins showing red numbers over the past 24 hours.

Is artificial intelligence going to flourish or ruin the world?

Despite the impressive performance, some figures believe the sector has a more pessimistic future. According to memecoin trader Murad, the developments in the sector “will replace more and more jobs every year”. As a result, there will be an increase in “anxieties and desperate attempts to ‘make it’”.

For traders, the industry will serve as a boost for the memecoin sector, as “the growth of AI capabilities will be one of the big forces accelerating the memecoin bubble.”

The financial giant Warren Buffett shared a more skeptical view on Saturday. The co-founder and CEO of Berkshire Hathaway revealed that he is still not convinced about artificial intelligence. To the CEO:

We let a genie out of the bottle when we developed nuclear weapons. Artificial intelligence is somewhat similar: it is partly out of the bottle.

Despite this, Buffet recognized the potential of AI technology to change the world for the positive.

On the verge of a millionaire boom

“The AI ​​industry is on the verge of a multi-billion dollar boom,” declared Alex Wacy. The analyst believes that the reasons for this are the vast and diverse potential of applications.

Furthermore, the expert emphasizes that interest in the sector has increased steadily over the past year. A combination of cryptocurrency and artificial intelligence could potentially “create a market valued in the trillions.”

According to the post, the market is expected to reach nearly $2 trillion by 2030, which suggests that the cryptocurrency industry should not overlook it.

Tokens like RNDR have shown remarkable performance over the past week, with a price increase of 45%. RNDR regained the $10 support zone this week after struggling to retest it over the past month.

Over the past 24 hours, the token’s price increased by 6.4% and its daily trading volume increased by 16.8%, with over $455 million traded.

FET is “a top-performing AI coin aimed at Nvidia’s earnings,” as stated by John Walsh. The trader predicts that the token will “seek a next step higher” after successfully retesting the $2.35 resistance level.

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FETs broke above this level over the weekend, rising to $2.50 on Monday and remaining above the $2.40 support zone since then.

At the time of writing, the token is trading at $2.42, which represents a 2.4% increase over the past 24 hours and a 22.9% increase over the past week.

FET's performance in the weekly chart. Source: FETUSDT on TradingView

Featured image from Unsplash.com, chart from TradingView.com

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