Artificial intelligence (AI)-focused crypto projects have been experiencing a decline in trading volume, according to market data firm Kaiko. Tokens such as Oasis Network (ROSE), Render (RNDR), and The Graph (GRT) have recently lost momentum, hitting their lowest weekly trade volume since January. This is a notable change considering the hype and attention these projects generated earlier in the year.
In January, rumors were circulating that tech giant Microsoft would be investing a staggering $10 billion into Open AI, a US-based AI research laboratory. Open AI is known for creating ChatGPT, a viral AI chatbot. This rumor created a buzz around AI-focused crypto projects, including SingularityNET (AGIX), Fetch.ai (FET), and Ocean Protocol (OCEAN). These projects experienced significant price increases of 136%, 91%, and 37% respectively.
While the AI-focused crypto projects saw a surge earlier in the year, Kaiko highlights Worldcoin (WLD), a crypto project co-founded by OpenAI founder Sam Altman, as having a unique launch. Worldcoin’s launch involved loaning nearly 90% of the circulating supply to market makers, with only 1% of the total supply being released. The launch aimed to convince people to use its eye-scanning technology, offering 25 tokens that currently hold a value of a little more than $50. However, Worldcoin is currently under investigation in the UK and France over privacy concerns.
Kaiko also highlights XRP, the digital asset used to operate Ripple Labs’ payments system, which recently had a landmark ruling in its favor against the U.S. Securities and Exchange Commission (SEC). The data gathered by Kaiko indicates sustained speculative interest in XRP, as its futures volume-to-open interest ratio remains above average on most exchanges.
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Looking at the top two crypto assets by market cap, Bitcoin (BTC) and Ethereum (ETH), Kaiko finds that they have experienced a massive decline in volatility over the last three months. The 90-day realized volatility for both BTC and ETH is currently hovering around two-year lows.
It is important to note that the trend of declining trading volume and volatility does not necessarily indicate a loss of overall interest in AI-focused crypto projects or cryptocurrencies in general. Market conditions can fluctuate, and it is possible that these projects may experience a resurgence in the future. Additionally, regulatory concerns and investigations, such as the ones Worldcoin is currently facing, can also impact the trading volume and performance of crypto assets.
Overall, the recent decline in trading volume for AI-focused crypto projects suggests a temporary loss of momentum. However, the crypto market is highly dynamic and subject to various factors. It will be interesting to see how these projects adapt and evolve in the coming months and whether they can regain the attention and excitement they generated earlier in the year.
