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Are AI Tokens Worth the Risk? Essential Questions Before You Invest

TL;DR

  • AI tokens are booming, tied to projects using AI in DeFi, data analysis, etc.
  • Some projects are just riding the wave, while some are genuinely delivering value.
  • Investing carries significant risks and requires research, especially on the project team’s expertise in AI and business.

AI tokens are quickly becoming one of the biggest narratives in the crypto market, thanks to the growth of AI over the past months. 

Per Coinmarketcap, these tokens currently have a market capitalisation above $9 billion, which somewhat reflects investors’ confidence in the technology’s potential to drive innovation in the crypto space and perhaps generate economic value.

But AI tokens are young and unproven. So, in this article, we explore what AI tokens are, a few popular examples, and investing tips for investors looking to join the trend. 

Are “AI Tokens” The Next-Big Crypto Trend?

AI tokens are basically cryptocurrencies associated with projects that integrate AI into their operations or applications. It could be DeFi projects using AI technology to automate tasks like decision-making, data analysis, and problem-solving. 

The five largest AI tokens include:

  • Render (RNDR), $1.7 billion market cap.
  • Akash Network (AKT), $698k market cap.
  • Fetch.ai (FET), $521k market cap.
  • SingularityNet (AGIX), $366k market cap.
  • OriginTrail (TRAC), $287k market cap.

For investors, the tokens are intended to be a way to get in early into these projects. Some tokens grant access to valuable AI services within the project’s ecosystem. 

AI tokens possess the same properties as regular cryptocurrencies such as Bitcoin, Ethereum, etc. However, they are intertwined with “AI,” which makes many consider them a better narrative. 

Are these enough reasons to invest in AI tokens? The answer is a definite no. 

Key Things to Consider Before Investing in AI Tokens

It’s worth mentioning that some projects are building just to ride the AI trend. However, there are real projects and team building to solve problems and provide value to their ecosystems. It’s largely the duty of investors to filter the noise and find genuine projects. 

AI tokens, like any cryptocurrency, carry significant risks. It’s crucial to understand these risks before investing any money. It is also not wise to blindly follow recommendations. Research individual projects, the underlying technology, and most especially, their teams. 

Thoroughly researching the AI project team before investing is crucial for mitigating risk and making informed decisions. Ask questions about the technical skillset, domain knowledge, and business acumen of the team before parting your money with the project’s AI token. 

Does the team have the necessary technical expertise in AI, machine learning, and specific subfields relevant to the project? Does the team possess business acumen and experience in bringing AI products to market? These are a few valid questions that could enable investors to assess the team’s expertise.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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