AI-focused crypto projects lack the intrinsic value suggested by the rising prices of their associated tokens, according to Coinbase analyst David Han.
He believes the rally in these coins reflects hype around the industry more than any real utility from their use.
“Projects may lack sustainable demand drivers in the short to medium term,” the study’s author noted.
According to CoinGecko, the market capitalization of tokens linked to AI crypto projects has grown to $25 billion this year. Notably, about 30% of this growth occurred on a single day, coinciding with a sharp rise in Nvidia’s stock.
“Despite the rally, we are cautious about bold claims that crypto platforms have a unique opportunity to reshape the entire industry,” Han added.
He argues that technical issues related to decentralized networks significantly complicate competition with traditional market leaders.
As an example, the analyst cited Akash Network. The platform pays users for utilizing resources for cloud computing—a decentralized version of the same type of product offered by Amazon or Google.
According to Han, Akash’s usage is growing, but potential demand and supply issues have already begun to surface. As more participants deploy their systems on the network, service fees decrease due to a lack of demand.
The analyst stated that Akash and similar projects will need to alter their token distribution structures in the future.
Han concluded that AI crypto projects aim to lure users away from centralized projects like Amazon Web Services or ChatGPT. The question remains whether they can offer something new and useful before investors shift their focus elsewhere, the study’s author concluded.
Earlier, CoinGecko analysts reported an average increase in AI tokens of 260% since the beginning of the year.