Coinbase Addresses the Exaggerated Surges in AI Cryptocurrencies

• Coinbase asserts that the recent surges in AI cryptocurrencies are exaggerated.
• Research analyst David Han stated that AI platforms can disrupt the industry.
• Han points out the challenges faced by AI projects such as Akash Network, which is experiencing declining supply.

In a recent report, Coinbase asserted that the prevailing hype and surge in cryptocurrencies related to Artificial Intelligence (AI) is exaggerated. David Han, a research analyst at Coinbase, pointed out the rapid changes in the AI sector, commenting that crypto-focused platforms are “uniquely positioned to disrupt” the industry.

According to CoinGecko data, the AI crypto projects have soared to $26 billion this year. About 30% of these surges occurred in a single day following the rise in Nvidia stock, an industry leader. Today, the AI crypto coins boast a market cap of $25.4 billion, up 5% in 24 hours.

Han asserted that AI tokens usually have positive impacts from the broader crypto industry’s bullish sentiments and the circulation of AI-related news. Reiterating that the attention given to AI tokens these days is overstated, he added,

<blockquote> “Our contrarian view is that the value potential for many AI tokens may be overstated as a result of broad attention on the AI industry and that many AI tokens may lack sustainable demand side drivers in the short to medium term.” </blockquote>

Further, Han shed light on the challenges faced by AI tokens such as Akash Network. Akash Network works similarly to Amazon and Google by paying users to repurpose their computing power for cloud computing. Han stated that Akash Network experiences declining potential supply and demand issues despite increased usage.

Moreover, Han posited that projects like Akash Network should alter their token distribution methodology to attract more attention. He added that only “nuanced” use cases could make them overpower centralized giants like Amazon Web Services or ChatGPT.