For cryptocurrency investors, NVIDIA (NVDA -5.55%) has become the only stock to watch for clues about the future direction of artificial intelligence (AI) crypto tokens. As Nvidia stock goes, so does the AI โโcrypto token market.
So, with Nvidia stock surging after a monster earnings report in February, AI crypto tokens are also surging. Some are up 300% over the past month, and it all stems from a renewed sense of excitement around the AI โโmarket. But are any of these AI crypto tokens really worth buying?
What is Fetch.ai?
Recognizing that these are still the first entries for artificial intelligencethe only AI crypto token that catches my attention right now is Fetch.ai (FET -5.28%), which has increased almost 400% in the last 30 days and almost 300% over the year. As of March 7, Fetch.ai had a market capitalization of $2.2 billion and was ranked 51st among all cryptocurrencies in terms of overall market capitalization.
The goal of the token is to build, deploy and monetize AI by creating an open network for AI agents. That's a mouthful, but what it really means is that Fetch.ai wants to offer a marketplace for paid AI services.
Whenever you need an AI bot to perform a task, you would theoretically go to the Fetch.ai marketplace and hire the right one to do the job for you. You will then use the Fetch crypto token to pay for the service.
Fetch.ai vs. ChatGPT
What makes Fetch.ai so interesting is that it sounds very similar to the concept of the new ChatGPT store, which now allows you to hire custom AI robots to perform certain tasks for you. Since many more people know about ChatGPT Than Fetch.ai, I'm not entirely convinced that the crypto should be worth $2.2 billion, but you can start to see why some investors are excited about its long-term prospects.
Image source: Getty Images.
What gets interesting is whether Fetch.ai can sell companies (i.e. large corporations) on the concept of these AI robots. A new partner is Deutsche Telekom, which is studying potential uses for AI robots.
This could become a great example of how AI robots provide utility on a large scale, and it ties into the whole idea of โโinvesting in Nvidia in the first place. After all, large companies like Deutsche Telekom are the ones that will buy Nvidia's semiconductors and use its data centers.
Warnings for investors
You should definitely do your due diligence in this sector if you want to benefit from the long-term convergence of AI and cryptocurrencies. Otherwise, you could end up in the same situation we saw with metaverse crypto tokens in 2021-22.
Investors sensed a huge market opportunity around the metaverse, with some large metaverse crypto tokens eventually reaching billion-dollar market caps. But nowadays no one buys metaverse crypto tokens.
And that's because metaverse crypto tokens never knew how to appeal to more than young gamers and early adopters of technology. Big brands set up shop in the metaverse hoping to find new customers and new sources of income, but things never went as planned.
And that's a concern I have about Fetch.ai. Sure, the idea of โโusing paid AI robots sounds great, but will it ever appeal to a mainstream audience? It would be great to see more examples of people actually using Fetch.ai bots in their daily lives.
Should you buy Nvidia instead?
If you were forced to choose just one AI crypto token right now, it would be Fetch.ai. For a little over $2 per token, you can theoretically gain access to almost unlimited benefits if the use case for autonomous AI agents in the enterprise market develops as expected.
That said, risk-averse investors might be better off focusing on top names in the AI โโmarket, like Nvidia, rather than trying to make speculative bets on AI crypto tokens they've never heard of. Picking winners in an emerging tech market is always risky, so for now I'm sticking with Nvidia, up more than 80% on the year, as the best way to play the future in AI.
Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Fetch and Nvidia. The Motley Fool has a disclosure policy.
