AI-Related Coins Slide as Google Search Shows Peak Retail Investor Interest

Spikes in crypto-related Google search queries have historically occurred at major market tops, validating legendary investor Warren Buffet's mantra of buying in doom and selling in boom.

Spikes in crypto-related Google search queries have historically coincided with major market tops, a phenomenon that aligns with legendary investor Warren Buffett's dictum to "buy when there's blood in the streets."

Now, a similar dynamic appears to be unfolding in the market for tokens that are supposedly linked to artificial intelligence (AI).

The so-called AI coins, such as FET, RNDR, TAO and GRT, have seen their market value decline by as much as 30% over the past seven days, according to data from Coingecko. This coincides with a peak in Google Trends for searches related to artificial intelligence.

FET, for instance, is the fourth-worst performer among the top 100 cryptocurrencies over the past seven days. In comparison, the flagship cryptocurrency bitcoin (BTC) is down 2.8% during the same period, while the CoinDesk 20 Index (CD20), a measure of the broader crypto market, is down 6%.

Google Trends is a service that gauges the intensity of retail investor interest in trending topics. It showed the value for the search query "AI" over the past 12 months reaching a peak of 100 last week, which is also the value over the past five years. A score of 100 indicates the peak popularity – the maximum number of searches observed for the query during a given time frame.

This suggests that excitement about artificial intelligence is hitting the mainstream, with an increasing number of existing and potential retail investors seeking information on the topic and bellwether stocks, such as the Nasdaq-listed chipmaker Nvidia (NVDA).

While the tool is only indicative, it could be a useful metric to watch, given that the masses tend to be driven by emotions and are often the last to enter a bull market and exit a bear market. For example, spikes in searches for BTC and Solana's SOL occurred at the respective price tops in May 2021 and November 2021.

It's also worth noting that bitcoin, which is known to have a strong positive correlation with NVDA, bottomed out with technology stocks in late 2022, following the debut of ChatGPT, which brought mainstream attention to artificial intelligence. According to GMO's Chief Investment Strategist Jeremy Grantham, the AI rally is a potential bubble within a bubble that could soon deflate. That's an observation that might warrant caution for those contemplating investment decisions.

CoinDesk is an independent operating subsidiary of Digital Currency Group, which owns Block.one, the publisher of EOS and Bullish, a cryptocurrency exchange. Both ventures have received investments from various parties and may hold cryptocurrency assets. CoinDesk journalists are not permitted to purchase stock in DCG.

EDITED BY

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team. He covers breaking news, markets and mining. Previously, he worked at the Wall Street Journal, covering private equity and sovereign wealth funds. He can be reached at omkar.godbole at coindesk.com.

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News source：https://www.kdj.com/cryptocurrencies-news/articles/ai-coins-slide-google-search-peak-retail-investor.html

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