Institutional investors trust AI over crypto
Cryptocurrencies led by Bitcoin are apparently on a bull run. Nevertheless, a new survey revealed that most institutional investors are not interested in the development and would rather put their money into AI (artificial intelligence).
The survey says…
With all the hype directed at machine learning, especially in language and graphics generation today, crypto seems to be slowly losing its appeal to institutional investors. ChatGPT, in particular, is all the talk of the town lately when it comes to generating AI output.
Going back to last year, JP Morgan surveyed 835 institutional traders belonging to 60 markets to find out what they believe are the key technologies that will dominate future trends. The results showed that most of them prefer to invest in mobile apps. Tied for second place in their choices are blockchain and distributed ledger technology along with AI and machine learning.
Fast forward to today, slightly more than half or 53% of respondents have changed their belief in AI, making it the best choice to invest in. Meanwhile, only 12% of them said blockchain will be the one to shape . the future. Alarmingly, 72% of respondents said they would rather stay away from crypto.
Is there a bull run coming?
There is an ongoing narrative that cryptos led by Bitcoin are heading for a bull run. However, as previously reported, the oldest successful crypto in the market is apparently 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 to the $30,000 mark. On the other end of the spectrum, if it turns bearish, it could drop down to a support at $22,000.
If the JP Morgan survey indeed results in low confidence in crypto among institutional investors, a bear market may not be far behind. Retail investors likely have some cash to spare as many lost their money or were left to become bag holders during the long drought in crypto last year.
Is AI really a good investment?
According to Kiplinger, citing data from the International Data Corporation (IDC), there is strong potential for AI going forward. This is true even without putting ChatGPT and other generative AI into the equation.
Based on the forecast of the source, the AI market is expected to have a robust performance over the next four years. To illustrate 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 NGO also warns that the increasing use of the technology could potentially dilute its performance and lead to system failures.
Final thoughts
AI and crypto are both very 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 widespread.
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 made great profits investing in cryptocurrencies, it is a very 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 variety of industries, the adoption of cryptocurrencies has been slow and uncertain.
Ultimately, the decision to invest in AI or crypto (or any other investment option) depends on the individual’s risk tolerance, investment goals and overall portfolio strategy. It is important to do your own research and seek professional financial advice before making any investment decisions.
