Analysts Highlight Surge in AI Tokens and ‘Cat’ Coins

Alongside Bitcoin’s new highs, altcoins, particularly those related to artificial intelligence and cat-themed meme tokens, are showing positive trends. This is according to a report by Bitfinex. 

Perplexity and Surprise

According to the report, the altcoin market is experiencing a “rapid revival,” as evidenced by the Total3 index, which tracks the price dynamics of all crypto assets except Bitcoin and Ethereum.

The market capitalization of the sector has surpassed $700 billion, reaching a new local high of over $720 billion for the first time in this cycle. 

The indicator shows a significant gap from the peak values of the bear market, indicating growing interest and investment volumes in altcoins, analysts believe.

“The index is about 16% away from the $837 billion mark reached in April 2022. This was its last significant high before the start of the bear market. However, there is still room for altcoins,” Bitfinex emphasized. 

Total3 reached an ATH in November 2021 with a capitalization of $960 billion, which is still 33% higher than the current level.

“The altcoin sector is rotational and tends to benefit when crypto investors diversify away from Bitcoin. Recent highs confirm this, as evidenced by the growth of the Total3 index, yet the direction of capital is perplexing and surprising,” researchers noted. 

Cats and AI

According to data from CoinGecko, cited by analysts, AI tokens and ‘cat’ meme coins have shown significant growth—37% and 76% respectively (as of the time of writing). 

The dynamics of AI-related coins are partly driven by announcements at the ETHDenver conference, Bitfinex claims. 

Moreover, the total number of AI projects has increased from 180 in November 2023 to 250 currently. Investment volumes in the sector have also risen.

“The artificial intelligence sector has become a leader among projects listed on centralized exchanges. It has boosted altcoin sales volumes. […] We believe the AI sector may have a second growth phase, potentially surpassing other trending areas like meme tokens in the coming months,” the report states. 

Bitfinex noted that the capitalization growth of ‘cat’ coins to $867 million shows a shift towards animal-themed meme coins. However, 80% of the category’s volume is concentrated in three coins: WEN, POPCAT, and TOSHI. 

Speculation around meme tokens has also increased trading volumes on decentralized exchanges on Solana. Since the beginning of March, the figure has reached $19 billion, slightly below Ethereum’s $24 billion.

Earlier, the increased network activity in Ethereum due to the popularity of meme coins led to fees reaching a two-year high. From March 2 to 9, transaction fees in the mainnet reached $193 million. 

Analysts at K33 Research have seen the meme coin rally as a sign of an impending altseason.