AI-related Cryptocurrencies Soar on the Wings of ChatGPT

OpenAI’s launch of ChatGPT has significantly influenced the AI-related cryptocurrency market, according to a study conducted by the Blockchain Research Lab in Hamburg, Germany. The study details how this artificial intelligence (AI) product instigated a rising tide in the value of such assets, a dynamic underpinned by its monumental success.

ChatGPT exploded onto the scene in November 2022 and quickly carved out a place in internet history as one of the most rapidly growing web platforms. Astonishingly, within the first five days of its existence, the platform attracted over 1 million daily users. The growth trajectory remained steep, amassing an impressive 100 million monthly users by January 2023. While OpenAI has remained tight-lipped about current user statistics as of June 2023, industry reports hint at a staggering total of around 1 billion users.

Ripple Effect

This remarkable surge in popularity sparked a ripple effect that reached beyond the confines of AI and into the world of cryptocurrency. The Hamburg-based researchers identified a strong correlation between ChatGPT’s launch and a simultaneous boost in AI-related crypto-assets. This pattern emerged against a backdrop of a bearish market and investor caution.

According to the study, in the month following ChatGPT’s launch, AI-related cryptocurrency prices surged by a minimum of 10.7%, extending to 35.5% within the subsequent month. The maximum price increases in these periods were even more impressive, rising to 15.6% and 41.3% respectively.

In trying to decipher the reasons behind this surge, the researchers pinpointed media and marketing excitement along with positive public sentiment. The inference here is that investors saw the AI-related crypto assets as possessing greater potential or value after ChatGPT hit the market.

A compelling observation from the study suggests that institutional investors might have redirected their funds towards large-scale AI projects following the launch. This, in turn, could have triggered a domino effect where retail investors also started backing AI-related cryptocurrencies, influenced by the activity of institutional investors.

ChatGPT as Educational Resource

Another interesting hypothesis raised by the researchers revolves around ChatGPT’s capabilities as a potent educational resource. They suggest that the platform may have demystified complex and technical concepts for retail investors, allowing them to make more informed decisions about their cryptocurrency investments.

While AI-related cryptocurrencies soared, the assets not linked to AI merely plodded along. Their stagnation started in the second quarter of 2022 and continued through to June 2023. Currently, the sentiment towards these cryptocurrencies remains bearish, as mirrored by the drop in Google searches for “crypto” to its lowest point since 2020.