Cryptocurrency
AI tech boom: Is the artificial intelligence market already saturated?
From voice assistants to algorithms predicting global market trends, artificial intelligence (AI) is seeing explosive growth. But as with any emerging technology, there comes a point where innovation risks giving way to oversaturation.
The rapid proliferation of AI tools and solutions in recent months has ignited discussions among industry experts and investors alike. Are we witnessing the zenith of AI’s golden age, or are we on the precipice of a market saturated beyond capacity?
The tech landscape has always been dynamic, with innovations often outpacing the market’s ability to adapt.
Historical tech boom-and-busts
The late 1990s saw the dot-com bubble, a period marked by exuberant optimism around internet-based companies. Startups with little more than a web presence achieved staggering valuations, only for many to crash spectacularly when the bubble burst.
In 2017, the world witnessed a surge in initial coin offerings (ICOs), a fundraising method where new cryptocurrency projects sold their underlying tokens to investors.
This period was marked by immense enthusiasm for the potential of blockchain and decentralized technologies. However, excitement often overshadowed the practicality and viability of many projects.
As a result, investments were made in ventures that either had limited real-world applications or, in some cases, no genuine ties to cryptocurrency whatsoever.
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A notable example was during 2017’s “blockchain naming” trend with the company previously known as “Long Island Iced Tea Corp.” The company made soft drinks and had little to do with blockchain. In a bid to capitalize on the blockchain hype, the company rebranded itself as “Long Blockchain Corp.”
Following this rebranding, the company’s stock price soared, with shares rising by an astonishing 275% in just one day. This increase, despite no substantial shift in its business model or operations, highlighted the speculative nature of the market at the time and the lengths to which companies would go to ride the blockchain wave.
The enthusiasm was short-lived, however. According to Bitcoin.com, almost half of the projects offering ICOs in 2017 had failed by February 2018.
AI’s impact goes beyond speculation
While the dot-com and blockchain bubbles were characterized by speculation and, at times, a lack of authentic value, the AI wave is fundamentally different.
Companies like Microsoft and Google are not just dabbling in AI — they’re integrating it into products and services that millions use daily, showcasing real-world applications that are actively improving industries.
Michael Koch, co-founder and CEO of HubKonnect — an AI platform for local store marketing campaigns — told Cointelegraph:
“The AI market feels saturated because people who thought they were technologists and failed at crypto are now moving onto the next hot technology, which is AI — but there are actually real builders and leaders in AI. There needs to be advanced eyes out there for people to really continue to build and take advantage of the evolution of AI.”
Google’s generative AI, Google Bard, attracted over 140 million visitors in May alone, sports teams are receiving real-time analytics, and AI chatbots are becoming more time and cost-efficient.
The modern AI gold rush
The allure of artificial intelligence has led to a surge in AI-driven tools, solutions and startups. According to Precedence Research, the global artificial intelligence market was valued at $454 billion in 2022 and is projected to grow to $538 billion in 2023.
Venture capital (VC) has been a significant funding source for the AI sector in 2023. Data from PitchBook indicates that generative AI startups raised over $1.7 billion in Q1 of 2023, with an additional $10.7 billion worth of deals announced that were not yet completed.
Some of the most notable raises included Google-backed Anthropic, which secured $450 million at a reported $5 billion valuation. Builder.AI raised $250 million. Mistral AI managed to raise $113 million without a product or even a proof-of-concept. With the injection of VC thrown at these AI startups like wildfire, one can draw some similarities to the ICO bust. In that situation, there was also a lot of hype without any actual use cases or proof of viability. However, what distinguishes AI is its multitude of use cases and real-life examples of success. Take, for instance, ChatGPT, which rapidly reached 100 million users in just two months, demonstrating AI’s tangible impact.
Yet, with this rapid growth and high valuations, some feel the AI market is overheating. JPMorgan’s chief markets strategist, Marko Kolanovic, believes the AI market is near its saturation point. As reported by Forbes, Kolanovic said the recent market uptick is a result of an “AI-driven bubble” and that the hype around the technology was due to the “popularization of chatbots that often fail in basic questions” rather than “AI-powered earnings growth.”
Leif-Nissen Lundbæk, founder and CEO of generative AI company Xayn, has a contrasting view and believes we are only at the tip of the iceberg. He told Cointelegraph:
“The AI market is not close to becoming saturated. Currently, companies have tried their hand here and there, with some proofs-of-concept materializing. The real large-scale production cases are only getting started, or are yet to come.”
Between saturation and innovation
The sheer volume of companies entering the AI space has raised concerns about a potentially saturated market. Companies worldwide are now utilizing AI as part of their core functionalities. From 10Web’s no-code website builder to RainbowAI’s weather app, and from ICarbonX’s AI providing personalized health analyses to SherpaAI’s virtual personal assistant, the stage has been set for countless others to follow suit.
Lundbæk recognizes that the influx of new companies could lead to the market becoming saturated in some areas but does not see it as a pertinent issue, stating, “The business-to-customer market is perhaps a bit more saturated but has not yet reached full capacity, while the business-to-business market is only in its infancy, even though AI has been around for a while. The vast majority of corporations are only using AI or machine learning for a few visible projects, if at all, that are easier to implement with lower risk, but aren’t applying it yet on a large scale.”
Koch says that the influx of newcomers might give the illusion of an oversaturated AI market, but he views initial saturation as a necessary phase to foster future advancements.
He stated: “AI will never be saturated because we are only on the first off-ramp of the AI super highway. It seems saturated because people from other industries are trying to step into the space, but when it comes down to innovation, there’s already a select group of companies that are so far ahead and that have been in the AI space for decades. To be able to drive innovation forward, saturation will arise at a basic level, but there are elite players and companies that are leading the future of AI.”
Reflecting on AI’s market dynamics
The rapid growth, high valuations and influx of new entrants into the AI realm have sparked debates about market saturation. Historical tech bubbles, such as the dot-com era and the blockchain hype, serve as reminders of the potential repercussions of unchecked growth and speculation.
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However, the depth of AI’s potential is far from fully realized. The technology’s tangible impact speaks to its practical and transformative nature.
It’s evident that the AI market is multifaceted. As with any burgeoning technology, the challenge is to strike a balance between rapid growth and sustainable development.
TL;DR
- ETH has dropped 11% over the past month, with analysts warning of a possible further decrease to $1,800 if key support levels fail.
- Others predict a potential rebound, citing a “bear trap” pattern and historical trends.
Further Pain for ETH Bulls?
Ethereum (ETH) has been among the worst-performing cryptocurrencies (from the top 10 list) lately, with its price dipping by 11% on a monthly scale. It is down 4% in the past 24 hours and currently trades at around $2,300 (per CoiGecko’s data).
One popular analyst who thinks ETH’s decline could be far from over is X user Ali Martinez. He outlined the $2,290-$2,360 range as a “key support” level, where 1.9 million addresses hold approximately $52.3 million worth of the asset.
The crypto enthusiast believes ETH could crash by 20% to as low as $1,800 should its price dip below that zone. Recall that its valuation briefly plunged to $2,260 a few hours ago.
Certain on-chain metrics also suggest that Ethereum could experience a further correction in the near future. One example is the “In the Money” indicator, which is down by 0.19% daily. It shows the change in the number of ETH investors currently sitting on paper profits. As of now, 54% are in the green, while 39% are underwater.
The Bullish Scenario
Contrary to Ali Martinez’s assumption, numerous other analysts are optimistic that ETH is poised for a revival. The X user Phoenix thinks the asset’s chart has formed a “bear trap,” signaling a potential resurgence in the following months.
JAVON MARKS claimed that Ethereum’s pattern seems to have mirrored the one from 2023, which led to a 165% price increase.
“2023 looks to have been the blueprint for another massive upside that can soon be transpiring in this crypto market. Target is at $4,723.5, and a break above can welcome $8,100+ into play, projecting another near 2X in price, if not much, much more,” the analyst argued.
Last but not least, ETH’s RSI has recently plummeted to a bullish ratio of around 30. The Relative Strength Index (RSI) helps traders assess overbought or oversold conditions and thus predict possible price reversals. Readings below 30 generally indicate that ETH is oversold, which could be a precursor of a rally. Conversely, a ratio above 70 could be interpreted as bad news for bulls since it can be followed by a correction.
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Ethereum is at its weakest level against Bitcoin since early 2021 as the ETH/BTC ratio continues to break down.
The ratio is a measure of the price of ETH in Bitcoin terms, not in US dollars. Despite falling 21% from its all-time high, Bitcoin has remained robust, whereas Ethereum remains down 53% from its peak in 2021.
In a post on X on Sept. 16, ITC Crypto founder Benjamin Cowed predicted that the ETH/BTC ratio will “likely bottom between 0.03-0.04 and then trend up in 2025.”
It’s almost over.
I think #ETH / #BTC will likely bottom between 0.03-0.04 and then trend up in 2025.
It could bottom as early as this week or as late as December
Based on prior capitulations, I think it will happen sooner rather than later
Will make a video about it tomorrow https://t.co/rwqj5u4n8A pic.twitter.com/lc7iMruoqf
— Benjamin Cowen (@intocryptoverse) September 16, 2024
He added that it could bottom as early as this week or as late as December, but “based on prior capitulations, I think it will happen sooner rather than later.”
Whales Offloading ETH
Head of research at Galaxy, Alex Thorn, also observed the disintegration of Ethereum prices, reporting that ETH/BTC just traded on a 0.03 handle for the first time in three and a half years.
ETHBTC just traded on a 0.03 handle for the first time in 3.5 years (apr 2021)
-53% since the merge in sep 2022
what stops this train? pic.twitter.com/Olj6SGEiVe
— Alex Thorn (@intangiblecoins) September 15, 2024
Meanwhile, analyst ‘Master Kenobi’ said that these patterns were cyclical. The ETH/BTC pair historically declined after a Bitcoin halving, with trend reversals occurring 168-224 days following the event in previous cycles. He added that a reversal is expected soon as it is currently around 150 days after the halving.
“Fundamentally, nothing has changed for Ethereum in a negative way,” he said before adding:
“The current movement is artificially driven by a lot of FUD in the market, and the reality is that they want you to sell your ETH at a low price. The underlying strength of Ethereum remains intact, and this downward pressure appears to be a tactic to shake out weak hands.”
On Sept. 16, Galaxy Trading observed that markets are now seeing the lowest sentiment for Ethereum since 2017 before adding:
“In my opinion, people are in such disbelief that they forget how quickly ETH can surge once it starts moving.”
“Right now, ETH is approaching its biggest support line since its inception,” they said before adding, “This isn’t the time to be bearish.”
Half of my feed is ETH FUD at this point.
— antiprosynthesis.eth ⟠ (@antiprosynth) September 15, 2024
ETH Price Outlook
On Sept. 16, industry observer Colin Wu reported that an “ancient whale” who received 16,636 ETH from ShapeShift at $5.23 per coin in February 2016 has now started selling.
This has added to the negative sentiment sending ETH plunging 6% on the day, dumping the asset to an intraday low of $2,260 during Monday morning trading in Asia.
Ethereum has been trading at its lowest level since January, but there is solid support here, which may remain until the overall market sentiment improves.
Even renowned analysts were piling on the ETH FUD:
How it started How it’s going pic.twitter.com/PdLawNI2yT
— _Checkmate ⚡☢️️ (@_Checkmatey_) September 16, 2024
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Cryptocurrency
Onboard Secures Funding from Coinbase Ventures & LAVA to Drive Global Expansion and Unlock Onchain Economy Potential
[PRESS RELEASE – Lagos, Nigeria, September 16th, 2024]
Onboard is excited to announce a significant expansion and rebrand, coupled with a successful capital raise from Coinbase Ventures and LAVA. This expansion marks the evolution of Onboard from a digital money app and a global P2P exchange, to a comprehensive platform and ecosystem designed to empower onchain builders and creators globally.
The world is facing unprecedented challenges, with over 3.5 billion people living below the poverty line, 75-90% currency devaluation, and rampant double to triple-digit inflation across various regions. Onboard believes that rather than battling outdated systems, the way we change this, is by focusing on the transformative possibilities of the onchain economy.
Onboard empowers independent builders and creators to help bring the world onchain. Onboard’s vision is to enable anyone, anywhere to come onchain and live a radically better life. Their gateway enables people to come onchain with as little as $1 in under 2 minutes. However, the true value lies in the applications and experiences that make this economy accessible, engaging, and transformative.
“To truly unlock the potential of the onchain economy, we need to support the creation of actually useful onchain apps and experiences. This is where builders and creators come in. This rebrand signifies our commitment to fostering a thriving onchain ecosystem that benefits everyone.” – Yele Bademosi, Co-Creator of Onboard.
Onboard is dedicated to building the ultimate financial platform and support community for onchain dreamers—those independent builders and creators. We believe that by inviting the world’s best minds to join us, we can create exceptional onchain applications and experiences that will inspire and enable more people to embrace the possibilities of this new economy.
The capital raised from Coinbase Ventures and LAVA will be pivotal in accelerating Onboard’s growth and expanding its offerings to meet the needs of the global onchain community. This funding will support the development of new financial tools, resources, and community initiatives aimed at empowering onchain creators and builders.
The onchain economy holds tremendous potential to empower people around the world. Onboard’s on and offramps enables safe, low-cost, and low-barrier entry to the onchain world, bringing the benefits of this new economy to people who need it most. We’re excited to partner with Onboard in making economic freedom more accessible to all.” – Shan Aggarwal, Vice President, Corporate & Business Development, Coinbase Ventures.
About Onboard
Onboard is building the ultimate financial platform and support community for onchain dreamers—independent builders and creators developing applications and experiences to bring the world onchain. With a mission to expand the onchain economy and make it universally accessible. Onboard is committed to enabling anyone, anywhere, to live a radically better life through the possibilities of the onchain economy.
Website: onboard.xyz
Farcaster: @Onboard
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