Are These AI Tokens Really Once-in-a-Decade Investment Opportunities?

In early 2023, artificial-intelligence (AI) tokens continue to be one of the hottest segments of the crypto market. Some of the most popular crypto AI tokens — such as Fetch.AI (FET 2.92%) and SingularityNET (AGIX -0.26%) — are posting 20% gains in a single day. 

Are These AI Tokens Really Once-in-a-Decade Investment Opportunities?

SingularityNET, trading for just pennies at the beginning of the year, is up a mind-boggling 650% over the past 30 days and now ranks among the top 100 cryptos in the world.

Are These AI Tokens Really Once-in-a-Decade Investment Opportunities?

All of this has been made possible by the spectacular success of ChatGPT, the AI-powered chatbot from OpenAI that has taken the internet by storm in recent months. Just about anything related to ChatGPT and AI is generating buzz these days, and that has me wondering if these crypto AI tokens really are the once-in-a-decade investment opportunities they seem to be.

Are These AI Tokens Really Once-in-a-Decade Investment Opportunities?

What are crypto AI tokens?

The easiest way to think about crypto AI tokens is that they are digital tokens that enable users to get access to powerful AI technology. In many cases, you are using these tokens as currency to pay for AI products and services that are available on a blockchain.

Are These AI Tokens Really Once-in-a-Decade Investment Opportunities?

If you think about this from the perspective of ChatGPT, it would be much like paying ChatGPT (which is currently free) a crypto token to get its answers. The more detailed the response, the more you would presumably be willing to pay.

Are These AI Tokens Really Once-in-a-Decade Investment Opportunities?

Fetch.AI, for example, powers a network of autonomous AI agents that are able to carry out tasks with minimal human intervention. The vision here is big: It goes well beyond just answering a few questions online like ChatGPT.

According to Fetch.AI, new AI tools and services available via an app might enable businesses to reorganize their supply chains, allow homeowners to control their smart homes, and let big logistics players optimize their transportation networks. All of this would help power the new AI economy.

SingularityNET is a blockchain-based AI marketplace. Basically, instead of using an online marketplace to find human freelance talent, you are using an online marketplace to find AI bots.

The number of uses here is staggering, considering all the ways that businesses and individuals use freelancers and remote talent to get work done. Presumably, anything a human can do (“Write me a poem”), an AI bot can do better (“Write me a sonnet in the style of Shakespeare”).

From this perspective, you can see why these crypto AI tokens are exploding in value. There’s clearly a massive market opportunity here.

We already know that ChatGPT can write computer code, so it can theoretically create anything online. If you’ve been following the growth of AI from the early days when the author and futurist Ray Kurzweil was writing about “The Singularity” — the moment when machine intelligence finally becomes more powerful than all human intelligence combined — then this is the stuff of sci-fi films. Any user, anywhere in the world, will have access to powerful AI tools in daily life.

Is AI becoming the new metaverse?

My concern is that AI might become the new metaverse for crypto investors. Remember how investors went crazy over metaverse stocks back in 2021?

There was a rush to buy metaverse tokens like Decentraland (CRYPTO: MANA) and The Sandbox (CRYPTO: SAND). They skyrocketed in price before crashing back to earth in 2022.

This might happen again, this time with AI. The craze for ChatGPT might become so intense that if a token even has the word “AI” in its name, investors will be tempted to buy it. This could lead to a huge speculative wave of buying, followed by plummeting prices. 

Thus, it is important for investors to be able to evaluate the long-term value of different AI tokens in the crypto market. The starting point is just being able to describe these tokens in non-technological terms, and then to find comparable publicly traded companies. You can also check out the best machine learning stocks and see how they are performing.

For example, some analysts have called SingularityNET “Fiverr (FVRR -0.59%) for AI.” Since Fiverr is a publicly traded company, you can use it as a building block for valuing SingularityNET. If investors think a marketplace for human freelance talent is worth $1.65 billion, how much should a marketplace for AI talent be worth?

Investor takeaways

With this in mind, one big takeaway is: Don’t buy a token just because it has the abbreviation AI in it. Understand its long-term value and see if it’s right for you. You don’t need to become an expert on machine learning or neural networks, but you should understand why blockchain technology is such a good fit for AI technology. From there, you will be much better equipped to value the long-term potential of different crypto AI tokens.

In the long term, I’m very bullish on artificial intelligence. Based on my own limited interactions with ChatGPT, I’m blown away by what it can already accomplish.

Right now, though, I cannot recommend any crypto AI tokens simply because the market is so frothy and speculative. Fetch.AI and SingularityNET appear to have a first-mover advantage here, but we also said that about Decentraland and The Sandbox. So buyer beware.

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