Funds are pouring into AI concept stocks! Expert: Cryptocurrencies may continue to trade sideways

An economist believes that speculative investors are turning their hot money into AI-related stocks, which is detrimental to the cryptocurrency market.

According to BIT Mining Chief Economist Youwei Yang, the stock market now treats every AI news as bullish news, and has triggered a "fear of missing out" (FOMO) mentality, which makes cryptocurrency investment Charm pales in comparison. Youwei Yang said: The hot money in the market is not "inexhaustible" and is now almost all flowing to AI, unless there are some breakthrough and convincing themes in cryptocurrency, or constructive progress and development. , otherwise cryptocurrencies would just trade sideways during this period, waiting for major market-shaking news.

"AI combined with cryptocurrency" major trend

However, Bitwise senior cryptocurrency research analyst Juan Leon believes that the intersection between AI and cryptocurrency is forming a "major trend." It is expected to add as much as $20 trillion to the global economy. He said: The intersection of AI and cryptocurrency will be larger than people imagine. By 2030, these two industries may add US$20 trillion to global GDP.

This forecast is in line with PwC’s estimate that by 2030, AI and cryptocurrency are expected to add US$15.7 trillion and US$1.8 trillion to the global economy respectively, with the overall combined effect reaching more than US$20 trillion.

Bitcoin Miners Enter the AI ​​Field

The race for “AI supremacy” is leading to unprecedented shortages of data centers, AI chips, and electricity. However, Bitcoin mining requires a lot of resources, including powerful chips, state-of-the-art cooling systems and critical infrastructure, which are all urgently needed by AI companies.

AI cloud company Core Weave proposed to acquire Bitcoin mining company Core Scientific for US$1.6 billion earlier this month, a premium of up to 55%, but the latter rejected it. The two companies previously had a 12-year, $3.5 billion cooperation agreement, and Core Weave can perform its AI-related services in Core Scientific's data center.

As for other cryptocurrency mining players, such as Hut8 and IREN, they have also expanded their business development to AI in recent months, seeking to expand revenue after the Bitcoin halving in April.

Using AI for DeFi trading

High-frequency traders are now also using AI to execute decentralized finance (DeFi) transactions in extremely short periods of time. Jochem Herber, head of the Nuklai ecosystem, said that this kind of automation will have a significant impact on DeFi and the operation of decentralized autonomous organizations in the next decade. He said: High-frequency traders are using AI to execute trades in thousandths of a second. This approach is being adopted in the DeFi market.

AI can automatically execute complex trading strategies, predict market trend analysis patterns, and optimize transactions without human intervention. He said: In the next 10 years, AI will be integrated into the DeFi field to improve the operation of decentralized autonomous organizations while maintaining transparency.

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