For investors in cryptocurrencies, Nvidia (Nasdaq: NVDA) It has become the one stock to watch for clues about the future direction of artificial intelligence (AI) crypto tokens. As Nvidia stock rises, the AI token market is trending as well.
So, as Nvidia shares soared after a massive earnings report in February, AI-powered crypto tokens also soared. Prices for some of them have risen by 300% over the past month, all of which stems from a renewed sense of excitement around the AI market. But are any of these AI tokens actually worth buying?
What is Fetch.ai?
Realizing that it is still the early stages of AI, the only AI coding code that catches my attention right now is Fetch.ai (Encoder: FET), which is up nearly 400% in the past 30 days and nearly 300% for the year. As of March 7, Fetch.ai's market cap was $2.2 billion and ranked 51st among all cryptocurrencies in terms of total market capitalization.
The goal of the token is to build, deploy, and monetize AI by creating an open network for AI customers. That's a hyperbole, but all it really means is that Fetch.ai wants to provide a market for paid AI services.
Any time you need a task done by an AI bot, you can theoretically go to the Fetch.ai marketplace and hire the right person to do the task for you. You can then use the Fetch encrypted token to pay for the service.
Fetch.ai vs ChatGPT
What makes Fetch.ai interesting is that it seems very similar to the concept of ChatGPT's new store, which now enables you to hire custom AI bots to do certain tasks for you. Since many more people know about ChatGPT than Fetch.ai, I'm not entirely convinced that the cryptocurrency's value should reach $2.2 billion, but you can start to see why some investors are excited about its long-term prospects.
Things get interesting when Fetch.ai can sell enterprises (i.e. huge companies) on the concept of these AI bots. One of the new partners is Deutsche Telekom, which is investigating potential uses for AI robots.
This could become a great example of AI bots providing benefit at scale, and ties into the whole idea of investing in Nvidia in the first place. After all, it's the big companies like Deutsche Telekom that will buy semiconductors from Nvidia and use its data centers.
Warnings to investors
You definitely need to do your due diligence in this sector if you want to benefit from the long-term convergence between AI and cryptocurrencies. Otherwise, you may end up in the same situation we saw with Metaverse crypto tokens in 2021-2022.
Investors sensed a huge market opportunity around the Metaverse, and a few of the large Metaverse tokens eventually reached a market capitalization of $1 billion. But no one these days buys Metaverse crypto tokens.
This is because Metaverse crypto tokens have never figured out how to attract more young players and early adopters of the technology. Major brands set up shop in the Metaverse, hoping to find new customers and new revenue streams, but things never go as planned.
This is one of the concerns I have about Fetch.ai. Sure, the idea of using paid AI bots sounds great, but will it ever catch on with a mainstream audience? It would be great to see more examples of people actually using Fetch.ai bots in their daily lives.
Should you buy Nvidia instead?
If I had to pick just one AI crypto icon right now, it would be Fetch.ai. For just over $2 per token, you can theoretically reach almost unlimited upside if the use case for autonomous AI agents in the enterprise market goes as expected.
However, risk-averse investors may be better off focusing on leading names in the AI market like Nvidia rather than trying to make speculative bets on AI crypto tokens they've never heard of. Picking winners in an emerging technology market is always risky, so, for now, I'm sticking with Nvidia, which is up over 80% for the year, as the best way to play the future in AI.
Should you invest $1,000 in Nvidia now?
Before you buy shares in Nvidia, consider the following:
the Motley Fool stock advisor The analyst team has just defined what they think it is Top 10 stocks Let investors buy it now… and Nvidia wasn't one of them. The 10 stocks that were discounted could deliver huge returns in the coming years.
Stock advisor It provides investors with an easy-to-follow blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stock picks each month. the Stock advisor The service has more than tripled the return of the S&P 500 since 2002*.
See 10 stocks
*Stock Advisor returns as of March 8, 2024
Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fetch and Nvidia. The Motley Fool has a disclosure policy.
With Nvidia's sales up 80% this year, are there any AI-powered crypto tokens you should buy now? Originally published by The Motley Fool
