Is AI Mimicking DeFi?
All Roads Lead To Blockchain
Regardless of what area of technological breakthrough you choose to examine, all current advancements are inherently linked to blockchain technology. It seems crazy to begin building for the future and excluding blockchain technology. I have often spoken of a blockchain-based world, and while for some, this may sound outlandish. It’s a lot closer than many are willing to accept, or believe.
The acceleration of AI in recent years is mind-numbing. Interestingly enough, the recent merge of AI and Crypto has also experienced rapid acceleration. However, after seeing AI projects booming, many are now extremely oversold. Oraichain comes to mind. ORAI peaked briefly at a little over $100 and is now trading at $2.32 at the time of writing. This is reminiscent of the initial DeFi surge and collapse that we experienced in 2020.
Is it perhaps possible, and even likely, that AI is mimicking DeFi’s initial “arrival” and is about to make a bigger comeback in terms of the market capitalization and valuation of these projects? Unfortunately, sectors and niches within the Crypto space are largely influenced, and even controlled, by the broader cyclical behavior of Bitcoin, as well as the macro environment. This all comes down to understanding the hierarchical structure of the market.
Oftentimes, a valid market movement is rendered impotent, or cut short, due to what is unfolding on a higher hierarchical level. This continues to be an area of understanding that many are somewhat ignorant of. That being said, I do believe the “rulebook” is busy being rewritten, or at least updated, or adjusted, if you will. Broader market conditions have had an impact on AI-based projects.
The Second Wave
Were the AI boom to have taken place under different market conditions, I do believe it could have played out differently. If indeed we are to experience a second wave similar to that of DeFi, then it is likely to take place during the upcoming bull market. Essentially, this simply means that AI-based projects are likely to outperform the broader altcoin market.
I am currently looking at several micro-cap altcoin investment opportunities, but primarily within the layer 1 sector. However, I am likely to begin exploring the AI sector once I am happy that I have exhausted the layer 1 space. The more I think about the next bull run, the more I consider that it is likely to be a lot less “focused” than previous bull markets. There are just so many niche areas that are still in their formative stages.
DeFi is far from an established movement, and neither is WEB3. These two are pretty much diamniotic-monochorionic twins, in my opinion. Then there is the tokenization of real-world assets, which is also only just beginning. NFTs still have to discover appropriate functionality… and then there’s AI. These are just the sectors spearheading the current Crypto market. It’s difficult to imagine a bull market that is primarily focused on a single sector or expression of Crypto.
Final Thoughts
I believe there’s a strong chance AI will come back with a vengeance in 2024 and 2025. For those who enjoy high-risk/high-reward investment opportunities, I am currently researching several micro-cap projects. As I mentioned earlier, I am likely to drop a couple of AI potential moonshots over the coming days, so stay tuned. See you in the next one, and remember, now’s the time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
