Driven by the enormous hype around ChatGPT, SingularityNET (AGIX -0.04%) has emerged as one of the favorite AI crypto tokens for investors. SingularityNET is up more than 750% for the year, and now trades around $0.40. The latest price estimates now value SingularityNET as high as $3.50, implying this crypto token could still have more upside potential.

But just how realistic is a price target of even $1? After all, at the start of this year, SingularityNET was trading for just $0.05. And it's not as if this crypto token hasn't been around for awhile, either. SingularityNET launched more than five years ago, and it has never traded higher than $1.86. Its 52-week high is just $0.67.  So let's stress-test the notion that SingularityNET is going to break through the $1 mark this year.

Beware the ChatGPT hype bandwagon

For long-term investors, the first red flag is that the price of SingularityNET is still extremely correlated with the buzz and hype around ChatGPT. That worked wonders when ChatGPT was the hottest topic in the tech world. For example, even the rumor that Elon Musk might be working on a ChatGPT competitor was enough to help send the price of SingularityNET soaring by 11% in just 24 hours.

Humanoid powered by AI technology.

Image source: Getty Images.

However, a lot has happened in just the past two months that might cool some of the early hype. For example, there have been some embarrassing mishaps as big tech giants rushed to market their own versions of ChatGPT. This has signaled that perhaps AI technology is not quite ready for prime time. As a result, some of the early hype could easily fade later this year, and that could bring a strong correction to the price of SingularityNET.

What are the catalysts for SingularityNET?

Nobody questions that SingularityNET has some world-class AI technology. After all, SingularityNET's technology helps to power Sophia, arguably the most famous AI-powered humanoid robot in the world. What other robot has been on The Tonight Show, given speeches to world leaders, traveled all over the globe, hung out with top celebrities, and earned citizenship with a developed country?

However, investors are always asking: "What have you done for me lately?" So for SingularityNET to more than double in price and hit the $1 mark, it needs to continue creating real-world products and services that make its AGIX token even more valuable. After all, there are plenty of other AI crypto token contenders out there, including Fetch.AI (FET -0.48%), which is up an impressive 365% this year.

The good news, from an investment perspective, is that SingularityNET is both a platform and a marketplace. This means SingularityNET has the technology to help anyone build, share, and monetize their own AI services or products. That is the platform piece of the puzzle. And SingularityNET also has a marketplace where anyone can browse, evaluate, and purchase AI-powered services using the AGIX token. That's the marketplace piece of the puzzle.

So a growth catalyst for SingularityNET could take one of two different forms. It could be a third party leveraging the SingularityNET platform to create a blockbuster AI product. Or it could be a "killer app" within the SingularityNET marketplace that everyone wants to use, download, and buy. 

From a platform perspective, one exciting development could involve, a new human life extension project that leverages technology from SingularityNET. Who doesn't want to live longer, right? A new crypto token for just launched, and this could spark additional investor interest in all the transformational applications of SingularityNET's technology.

Should you buy SingularityNET?

While its recent gains are impressive, SingularityNET is still the crypto world's version of a penny stock. Remember: On Jan. 1, 2023, SingularityNET was trading for mere pennies. So buyer beware. At some level, people are buying SingularityNET because others are buying SingularityNET, and this is exactly how investors get burned in the end with penny stocks.

If you are thinking about investing in any crypto AI token (not just SingularityNET), make sure you are doing it for the right reasons, and not just for the possibility of massive short-term gains. In the case of SingularityNET, you should know something about the technology and understand how it can be used to drive future growth. That will help you spot new catalysts and arrive at a fair value. That said, I'm bullish on SingularityNET for the long term, and think it could easily reach the $1 mark within the next 24 months.