Artificial Intelligence experienced a flare up in 2023 with the OpenAI company developing ChatGPT, a break grounding system based on AI. The technology allows users to access data more accessible and organized, as the program classifies answers to people’s requests. Although it’s not a perfect system, it contributed to spurring innovation in other areas, such as cryptocurrency and blockchain.
The crypto market relies solely on technologization, decentralization and tokenization, which depend heavily on data and automation. Hence, AI can strengthen various areas in crypto, from potential threats to analyzing market trends, like the Bitcoin price chart, an essential tool for investors and traders.
Considering AI’s involvement in crypto, experts believe that AI-based crypto assets will be decisive in 2024 when the market is set to encounter challenges and opportunities.
What do the numbers say?
AI tokens have plenty of use cases, from improving transactions within AI ecosystems to facilitating AI services exchange. These assets work based on data aggregation, analysis, and market forecasting, blending blockchain technology and artificial intelligence.
These special features delivered outstanding results in terms of market capitalization since AI-based cryptocurrencies reached the milestone of $7 billion, a significant growth compared to the previous year. Popular AI tokens also experienced a boost in value, such as graph (GRT), Fetch (FET) and AGIX).
Hence, it’s reasonable to say that we should expect similar, if not greater, values in 2024 when AI will settle more in markets. Investors are also advised to diversify their portfolios with AI-based assets since they might return high yields.
What’s behind the trend?
Although AI tokens have impressively grown in the past year, we must also consider their pros and cons. Indeed, they present favorable conditions for multiple use cases, from smart contracts, data analysis, market prediction and better transactions. They are also slowly bringing innovation from traditional industries, which AI has already been used for in real life.
However, investors must be wary of market volatility, as even AI tokens can experience value fluctuations in specific periods, even if they can better prevent these changes. At the same time, regulations in the crypto sector might hinder their innovation and acceptance, at least for a while, especially for investment opportunities and trading.
Watch out for your portfolio’s safety
The newness of this industry in the crypto market might attract unwanted attention from attackers, mainly because it’s not protected. Regardless of their features, cryptocurrencies can be stolen from someone’s digital wallet, and AI showed some flaws due to limited testing and exposure to sensitive data. AI’s use of data is like a double-edged sword, as it’s this technology’s main feature and threat.
Since they’re still categorized as assets, AI crypto can be protected by switching to an encrypted cold wallet with no internet connection and being cautious of the online services used, such as crypto exchanges and trading websites. Moreover, finding services that can secure data accuracy, protection and control is paramount to a safeguarded portfolio.
AI can be leveraged in many other ways
Besides blending in with cryptocurrencies, artificial intelligence can significantly support the market’s development. For instance, it can help make better decisions based on objectivity and accurate data rather than FOMO and personal background. AI can process massive amounts of data through which investors can quickly identify trends and potential threats.
Analyzing data with AI is the first step in building a reliable strategy as an investor or trader. Based on AI insights, users can calculate their risk tolerance and objectives and increase their productivity. Plus, they can monitor the effectiveness of their strategies parallel to market movements and massive price shifts. For traders, artificial intelligence can automate the process with algorithms and certain parameters.
What does AI think of crypto?
AI itself provided an interesting opinion about the matter in an experiment with Google’s Bard after being questioned on a few crypto aspects, such as how difficult it is to forecast the price of an incredibly volatile asset. It also offered some insight into the regulation battle from the SEC against cryptocurrency, showing how factors like a reliable Bitcoin market and growing adoption could impact the institution’s decision to be more cooperative.
When it comes to trends for 2024, Bard predicted an overall price increase for assets since more companies will use them to store value. On the other hand, when ChatGPT was asked about the supposed upcoming trends, it highlighted the development of DePINs, data availability layers and more tokenization.
Should more users get invested in crypto?
The cryptocurrency hype is never-ending, which might be suitable for the market and potential investors. That’s because the industry is constantly re-inventing itself, and developers find new ways to add improvements within networks, blockchains, and decentralized applications. Although there might be a talent shortage at the moment, what’s sure is that there is enough space for innovation.
However, crypto can also be considerably risky, especially for beginners, because its nature is rapid price changes that can either make someone rich or strip their portfolio from their assets’ value. Multiple factors contribute to this dangerous phenomenon, from the lack of regulations to the slow process of adoption, but even so, the ecosystem can be pretty tricky to navigate.
Hence, investors must be well-prepared with enough funds, safety nets, and a plan B because the unpredictability of the crypto market is unmatched, and it can send investors down a dangerous spiral of increasing their input for better portfolios when the real deal stands in being consistent and have a low profile. Facing the waves of volatility can be controlled better with a long-term strategy and avoiding FOMO.
Final thoughts
AI was the highlight of 2023, but it may continue on a similar path in 2024 with crypto assets. The blend between these technologies might break the internet this year as they’re both in demand, and innovation is supplied constantly, making AI crypto easily accessible and highly profitable if added to a balanced and well-constructed portfolio. So, prepare to watch AI take over the crypto market and change it forever.
