Investor Interest Shifts from Cryptocurrency to AI

The redirection of speculative investors’ “hot” money into stocks related to artificial intelligence is harming the cryptocurrency market, according to BIT Mining’s Chief Economist Youwei Yang in a conversation with The Block.

In his view, the stock market now perceives every piece of AI news as bullish, and thus “in light of the emerging FOMO, cryptocurrency has lost its allure.”

“The amount of ‘hot’ money in the market is limited, and it is currently directed towards AI. Until cryptocurrency can advance a compelling narrative, the sector will continue to trade sideways, awaiting significant upheavals,” Yang added.

Earlier, Bitwise’s senior cryptocurrency research analyst Juan Leon predicted that by 2030, global GDP will increase by $20 trillion due to the digital assets and artificial intelligence industries.

As a potential collaboration between the two sectors, the expert suggested partnerships between miners and AI companies.

This forecast aligns with an assessment by PricewaterhouseCoopers, which estimates that over the next five years, artificial intelligence and cryptocurrency will contribute $15.7 trillion and $1.8 trillion respectively to the global economy.

Participants in the digital asset market have also increasingly begun to use neural networks for interacting with DeFi. According to Nuklai’s ecosystem head Johem Gerber, AI automation of transactions will significantly impact blockchain operations.

“High-frequency traders use artificial intelligence to execute trades in milliseconds. This approach is applied in the decentralized finance market. Over the next decade, AI will integrate into DeFi and enhance operations in DAOs while maintaining transparency,” Gerber emphasized.

Back in June, mining company Core Scientific signed a 12-year contract with CoreWeave to provide infrastructure with a capacity of 200 MW for hosting Nvidia GPUs for AI computations.

In the same month, Elliptic experts noted an increase in the use of artificial intelligence in crypto crimes. AI has also been taught to detect money laundering through Bitcoin.