Coinbase Report Urges Caution on Emerging Crypto AI Sector
A new report from Coinbase suggests the recent hype and growth around cryptocurrencies related to artificial intelligence may ultimately prove unsustainable long-term without additional progress.
The analysis strikes a note of current market enthusiasm, pushing many AI tokens notably higher.
Key details:
- It comes amidst notable gains for tokens tied to AI sector advancements, massively outpacing Bitcoin.
- But Coinbase sees a lack of decentralization, adoption challenges, and other issues tempering its promise.
- Calls future of AI itself, including the role of blockchain technology, is uncertain at this early phase.
Despite the recent euphoria where crypto assets linked to AI have left Bitcoin, Ethereum, and even high-flying tech stocks in the dust this year, Coinbase believes structural flaws undermine the potential.
Analyst David Han highlighted the inherent contradiction between AI relying on heavily centralized data and infrastructure and crypto’s decentralization ethos. He also noted minimal adoption and capital flows thus far.
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Coinbase says major developments are needed
Han emphasized that developments are needed well beyond just making aspects of artificial intelligence decentralized before any ecosystem sees more solid grounding.
- “The value potential for many AI tokens may be overstated.” at this nascency per report.
- More progress is required before the promises of crypto-AI come close to matching reality.
According to CoinMarketCap data, AI tokens currently have a market cap of $37.9 billion. In particular, the top 5 AI coins by market cap include NEAR Protocol, Bittensor, Render, The Graph and Theta Network.
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For crypto market investors, this suggests extra caution is warranted when weighing the viability of AI token projects, according to Coinbase.
