Despite the uncertainty and volatility in the crypto market, a tremendous amount of innovation continues to take place in the industry. Cryptocurrencies are already much more than just digital currencies. With the launch of every new technology -- such as Web3, the metaverse, or artificial intelligence -- new crypto tokens become part of the story.
To give you an idea of where crypto's headed, consider these three tokens that are reinventing what cryptocurrencies can be.
SingularityNET
With the advent of ChatGPT and the latest phase of the artificial intelligence revolution, it seems like every technology company is trying to figure out how to monetize AI and tap into the public's seemingly unquenchable thirst for AI-powered innovation. Already, Alphabet (GOOGL 1.27%), Microsoft (MSFT 1.65%), and Meta Platforms (META 2.98%) have debuted new AI-powered offerings. But if you're looking for a crypto angle to the AI revolution, then look no further than SingularityNET (AGIX -2.65%).
Image source: Getty Images.
The name of SingularityNET refers to the much-hyped "singularity" -- that hypothetical moment in the future when a self-upgrading machine-learning intelligence will exceed the capacities of human intelligence. The goal of SingularityNET is to make the power of currently available AI tech widely available to all. To make that possible, the native token of the SingularityNET platform enables users to buy and sell AI products, as well as to trade data, tools, and models for training AI bots.
Think of the SingularityNET platform as an app store for AI tools where you pay with the SingularityNET token. Right now, there are a variety of offerings powered by AI, including language- and speech-recognition tools, as well as image-generation tools, on the platform.
Until ChatGPT appeared on the scene, SingularityNET was largely flying under the radar of investors, with the token trading for just pennies. But in January, the token surged. It now trades at $0.541, up more than 1,000% for the year. As long as the buzz around ChatGPT persists, there is likely to be tremendous upward momentum for SingularityNET.
Optimism
Optimism (OP -2.40%) is a Layer 2 scaling solution for Ethereum (ETH 0.06%), along the lines of Polygon (MATIC -2.64%), which was the most talked-about Layer 2 solution for Ethereum last year.
In late February, Optimism made headlines when it unveiled a unique partnership with Coinbase (COIN 4.68%), the second-largest cryptocurrency exchange in the world. Coinbase used open-source technology from Optimism to create its own proprietary Layer 2 scaling solution, called Base. Moreover, Coinbase signed on to become a core developer of the Optimism crypto ecosystem.
What this means in practical terms is that Optimism is suddenly one of the hottest cryptos on the planet, with a price gain of 200% so far this year. Decentralized finance (DeFi) tokens within the Optimism ecosystem are on fire right now, based on the long-term potential of the Coinbase deal. One idea being floated right now is that Coinbase could create a vast new DeFi ecosystem for its large institutional investor base, and all of it would be powered by Optimism's technology.
BitDAO
BitDAO (BIT -3.24%) is a decentralized autonomous organization (DAO) built on the Ethereum blockchain. The best way to think about a DAO is that it's an entirely new governance structure in which power is completely decentralized, and all activities take place on the blockchain. While DAOs can be used for just about anything, the goal of BitDAO is to invest in Web3, crypto, and blockchain projects.
Right now, BitDAO is considering the launch of a monster $200 million fund to invest in 100 early-stage blockchain projects. It has the backing of some of the biggest tech names on the planet, including billionaire Peter Thiel, crypto hedge fund Pantera Capital, and Singapore-based cryptocurrency exchange Bybit.
What makes BitDAO so unique is that it is changing how people invest in crypto. At times, it behaves like an angel investment firm, putting money into small, startup projects. At other times, it behaves like a hedge fund, deploying sophisticated risk management and hedging techniques. And at still other times, it behaves like a local investment club where everyone gets a vote in what the group invests in next. However you see it, the price is up about 75% in 2023.
Picking winners and losers
Of course, it's difficult to pick winners and losers when it comes to emerging technologies. For example, while SingularityNET might be the current market cap leader when it comes to new AI crypto tokens, there are plenty of AI tokens out there that might gain wide-scale adoption later. And it's still not certain what roles Google, Meta, or Microsoft might play in shaping the future of AI.
I'll be keeping my eyes on cryptos that appear to have the support of influential investors, large publicly traded companies, and big-name institutional funds. These cryptos, in my opinion, have some of the best prospects for future success, simply because they have more margin for error. Investing in crypto is risky and volatile enough, so it's best to look for ways to mitigate the risks.
