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AI-Linked Cryptocurrencies Slip as Google Search Shows Spike in Retail Investor Interest
Historically, spikes in Google search queries related to cryptocurrencies have occurred in major top markets, confirming legendary investor Warren Buffet’s mantra of buying on the downturn and selling on the boom. A similar dynamic now appears to be occurring in the market for supposedly artificial intelligence (AI) tokens.
According to the data source, so-called AI coins such as FET, RNDR, TAO and GRT have seen their market value decline by up to 30% in the last seven days Coingeckojust like Google Trends indicates search interest for artificial intelligence may have reached its peak.
FET is the fourth worst performer among the top 100 cryptocurrencies over the past seven days. Bitcoin market leader (BTC) fell only 2.8% in the same period while the CoinDesk 20 index (CD20), a measure of the broader cryptocurrency 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 past 12 months reached a peak of 100 last week. It is the same as the value of the last five years. A score of 100 represents peak popularity, which is the maximum number of searches observed for the query during a given time period.
In other words, enthusiasm for artificial intelligence has hit the high street, and a growing number of existing and potential retail investors are seeking information on it and Nasdaq-listed chipmaker Nvidia (NVDA) , a point of reference for everything related to artificial intelligence.
While only indicative, the tool can be a good indicator to keep an eye on 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 that of Solana SOL occurred at their respective price highs in May 2021 and November 2021, respectively.
It is crucial to note that bitcoin, known to have a strong value positive correlation with NVDA, hit rock bottom with technology stocks in late 2022, after the debut of ChatGPT, it increased general awareness about artificial intelligence. According to Jeremy Grantham, Chief Investment Strategist at GMO, the AI rally represents potential bubble within a bubble which could soon deflate.
This is an insight that may lead to caution among people considering investment decisions.