Cryptocurrencies headed by Bitcoin are seemingly headed on a bull run. Yet, a new survey revealed that most institutional investors are not interested in the developments and would rather put their money into AI (artificial intelligence).
With all the hype directed at machine learning, especially in language and graphics generation nowadays, crypto appears to be slowly losing its appeal to institutional investors. ChatGPT, in particular, is all the talk in town as of late when it comes to AI output generation.
Going back last year, JP Morgan surveyed 835 institutional traders belonging to 60 markets to determine what they think are the key technologies that would dominate future trends. The results revealed that most of them prefer to invest in mobile apps. Tied up in second place of their choices are blockchain and distributed ledger technology together with AI and machine learning.
Fast-forward to the present, a little more than half or 53% of the respondents have shifted their faith in AI, making it the top choice to invest in. Meanwhile, only 12% of them said blockchain will be the one to shape up the future. Alarmingly, 72% of those asked stated they would rather stay away from cryptos.
Is a Bull Run Coming Up?
There is an ongoing narrative that cryptos led by Bitcoin are on their way to a bull run. However, as reported earlier, the oldest successful crypto in the market is seemingly having a hard time breaking the $25,000 resistance level.
Crypto investors are hoping that Bitcoin will finally break past the resistance and continue its momentum going to the $30,000 mark. On the other end of the spectrum, if it does turn out to be bearish, it might drop down to a $22,000 support.
If the JP Morgan survey does indeed result in low trust for crypto on the end of institutional investors, a bear market may not be far behind. Retail investors likely have a little cash to spare as many lost their money or were left to become bag holders during the long drought of cryptos last year.
Is AI Truly a Good Investment?
According to Kiplinger, citing data from International Data Corporation (IDC), there is a strong potential for AI going forward. This is true even without putting ChatGPT and other generative AI in the equation.
Based on the forecast of the source, the AI market is expected to get a robust performance in the next four years. Illustrating the prediction in numbers, this market is expected to expand from $118 billion in 2022 to $300 billion by 2026.
A discussion at the World Economic Forum echoes the same confidence in AI as a transformative tool for businesses. However, the non-governmental organization also warns that the increasing use of the tech may possibly dilute its performance and result in system failures.
AI and crypto are both highly promising and innovative technologies with the potential for significant returns on investment, but they have different characteristics and investment profiles.
AI is a rapidly growing field with enormous potential for impact across multiple industries such as healthcare, finance, transportation, and many more. It is already being used to improve efficiency, reduce costs, and drive innovation in various sectors. As such, investing in this niche has the potential for long-term growth as the technology continues to mature and become more widely adopted.
On the other hand, crypto is a highly volatile and speculative investment that has been subject to extreme price swings in recent years. While some investors have profited greatly from investing in cryptocurrencies, it is a highly risky investment with a history of unpredictable price movements. Additionally, while the technology behind cryptocurrencies (i.e. blockchain) is promising and could have significant implications for a range of industries, the adoption of cryptocurrencies has been slow and uncertain.
Ultimately, the decision of whether to invest in AI or crypto (or any other investment option) depends on an individual’s risk tolerance, investment goals, and overall portfolio strategy. It’s important to do your own research and seek professional financial advice before making any investment decisions at all times.
Giancarlo is an economist and researcher by profession. Prior to his addition to Blockzeit’s dynamic team, he was handling several crypto projects for both the government and private sectors as a Project Manager of a consultancy firm.