Bitcoin
AI-related cryptocurrencies slide as Google search shows spike in interest from retail investors
Historically, spikes in crypto-related Google search queries have occurred at major market tops, validating legendary investor Warren Buffet’s mantra of buying into distress and selling into expansion. A similar dynamic now appears to be occurring in the market for tokens purportedly related to artificial intelligence (AI).
So-called AI coins such as FET, RNDR, TAO and GRT have seen their market value fall by up to 30% in the last seven days, according to the data source Coingeckojust as Google Trends indicates search interest in artificial intelligence may have peaked.
FET is the fourth worst performer among the top 100 cryptocurrencies over the past seven days. Market leader Bitcoin (BTC) fell just 2.8% during the same period, while the CoinDesk 20 Index (CD20), a measure of the broader crypto market, lost 6%.
Google Trends is widely used to gauge general or retail investor interest in trending topics. It shows that the value of the search query “AI” over the last 12 months peaked at 100 last week. It is the same value as in the last five years. A score of 100 represents peak popularity – the maximum number of searches observed for the query during a given period of time.
In other words, enthusiasm for artificial intelligence has reached Main Street, and a growing number of existing and potential retail investors are seeking information about it and Nasdaq-listed chipmaker Nvidia (NVDA), a benchmark for all things related to AI.
Although it is only indicative, the tool can be a good indicator to watch, as the masses are often driven by emotions and are often the last to enter a bull market and exit a bear market. For example, spikes in searches for Bitcoin and Solana SUN occurred at the respective price tops in May 2021 and November 2021, respectively.
It is crucial to note that bitcoin, known for having a strong positive correlation with NVDA, reached the bottom with technology stocks in late 2022 after the debut of ChatGPT raises general awareness of artificial intelligence. According to GMO Chief Investment Strategist Jeremy Grantham, the AI rally represents a potential bubble within a bubble this may soon empty.
This is an insight that can alert people who are considering investment decisions with caution.