A recent surge in Google searches related to cryptocurrencies often signals major market highs, consistent with Warren Buffett’s advice to buy in a recession and sell in a boom. This pattern is now appearing in the AI-related token market.
According to data from Coingecko, the market value of tokens such as FET, RNDR, TAO, and GRT have fallen by up to 30% over the past week. At the same time, Google Trends shows that search interest in artificial intelligence has peaked.
FET has performed the fourth worst among the top 100 cryptocurrencies over the past seven days. On the other hand, Bitcoin fell only 2.8% during the same period, and the CoinDesk 20 index fell 6%.
Google Trends, often used to gauge retail investor interest in hot topics, shows the search term “AI” reached a high of 100 last week. This is the highest in the last five years. This score represents the maximum search volume for a search term within a specific time period.
This surge in interest in AI suggests that public excitement is reaching new heights, attracting more retail investors into the market. Nvidia (NASDAQ:NVDA), a leading AI chipmaker, is also gaining attention with the AI trend.
Although topical, Google Trends can serve as a valuable tool to observe because retail investors often act on emotion and are typically the last to enter bull markets and the first to exit bear markets. For example, spikes in searches for Bitcoin and Solana coincided with their respective price peaks in May 2021 and November 2021.
It is important to note that Bitcoin, which has a strong positive correlation with Nvidia, bottomed out along with tech stocks in late 2022 following the launch of ChatGPT, which raised general awareness of artificial intelligence. Jeremy Grantham, chief investment strategist at GMO, pointed out that the AI rally could be a bubble within a bubble, potentially on the verge of bursting.
These insights may encourage investors to exercise caution when making investment decisions.
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