Recent price spikes in the cryptocurrency markets have been somewhat short-lived, most recently when Bitcoin (BTC) briefly rose to $65,000 on August 24.
According to data from Glassnode, traders have become wary of using leverage to hedge risk and chase bigger gains in the crypto markets. In The Week Onchain Newsletter on August 27, analysts explained that the “phenomenon” or reduced appetite for speculation and leverage is reflected in the “vast number of tokens currently showing neutral funding rates,” which “makes it likely that the spot market will take the lead in the short term.”
Binance Funding Rate Heatmap. Source: Glassnode
Despite Bitcoin giving up most of its gains on August 27, when it traded below $59,000, Fetch.ai’s FET token has shown remarkable performance over the past seven days. Since August 5 (the day BTC dropped to $49,500), the Artificial Superintelligence Alliance, which trades under FET, has gained 80%.
Let’s take a quick look at some of the factors that affect FET performance.
Altcoins benefit from AI story
AI tokens have been among the best performers in 2024, thanks to the emergence of various AI tools and the historic performance of Nvidia stock. The positive performance of Nvidia stock was followed by a strong rally in AI tokens, including FET. The tokens also rallied after Nvidia reported a positive earnings report, with the chipmaker due to report quarterly results this week on August 28.
AI Token Performance. Source: CoinGecko
FET’s value has increased by over 500% over the past 12 months and is up 90% since the beginning of the year. Agents (or programmable autonomous digital avatars) are one of Fetch.ai’s primary use cases. The AgentVerse platform allows autonomous agents to search, connect, and transact on marketplaces on behalf of users and businesses.
AgentVerse is essentially a SaaS (Software as a Service) platform. Ideally, the Fetch.ai team would like to see AI agents redefine monetization strategies, execute user requests such as optimizing hotel and flight bookings, and manage electric vehicle charging infrastructure.
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On June 13, Fetch.ai, Ocean Protocol, and SingularityNET merged to form the Artificial Superintelligence Alliance (ASI). The goal is to combine the AI capabilities of each protocol to create a vertically integrated technology stack. OCEAN and AGIX tokens are in the process of being converted to FET. The price of FET rose to an all-time high of $3.48 after news of the alliance broke.
In the months following the merger, the FET price fell along with the broader altcoin market, seemingly bottoming out at $0.70 on August 5. This sharp decline brought the FET price back into the December 2023 range, which is frowned upon.
FET/USDT 1-week chart. Source: TradingView
Historically, the cryptocurrency market has been filled with narrative-driven hype cycles, and while this may be an unpopular opinion, the AI space can become saturated with many identical solutions that don’t necessarily align with consumer demand or have the right type of product-market fit.
In the short term, AI token investors will likely be watching closely for Nvidia’s earnings report, which is scheduled to be released on Wednesday, August 28.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.