UPDATED: March 8, 2024, 2:06AM EST
Coinbase Institutional has adopted a bearish and contrarian stance on artificial intelligence tokens in the crypto industry, asserting that “the value potential for many AI tokens may be overstated.”
The statements came via a market intelligence report written by research analyst David Han and published earlier this week titled “Crypto’s AI Mirage” — where it is concluded that “many AI tokens may lack sustainable demand side drivers in the short to medium term.”
In the report, Han noted that Coinbase Institutional believes “some of the emerging trends in the AI sector could actually make it more difficult for crypto-based innovations to gain adoption in light of broader market competition and regulators.”
Han’s opinions contradict the current sentiment surrounding AI-related crypto tokens. According to CoinGecko, artificial intelligence-related tokens have increased, as a whole, by more than 37% over the past seven days — significantly more than most other sectors of the crypto market, excluding memecoins.
Despite Coinbase Institutional’s contrarian perspective on AI tokens, Han recognized that cutting-edge AI developments tend to support positive price movements for certain crypto tokens. For this reason, Han noted his firm believes “many AI-related tokens could continue to be traded as a more general proxy for AI progress” — a trend that has been observed in recent months.
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