Investors continue to hone in on a number of high-growth pockets of the market in search of the potential for outsized growth. In more speculative corners of the market, such as the cryptocurrency sector, we're seeing massive gains to start the week. As of 12:30 p.m. ET, three notable winners were Litecoin (LTC 0.42%), Internet Computer (ICP -3.57%), and Near Protocol (NEAR -4.68%), which had surged by 10.3%, 26.6%, and 17.7%, respectively, since the close of Wall Street trading Friday.
These moves contrast with the moves of other risk assets on Monday. All three major U.S. indices had slipped by around 0.2% at the time of writing. Accordingly, it does appear that many investors are continuing to allocate capital to this more speculative asset class, with capital inflows into digital assets remaining the core narrative in the market.
However, all of these tokens also have their own unique catalysts powering their recent surges.
Upgrades and AI-related innovations are driving these tokens higher
While many meme tokens and other highly speculative cryptocurrencies are rising due to what can only be described as the market's "animal spirits," there are projects that are being driven by other notable catalysts.
Most of the interest around Litecoin currently appears to be tied to a core upgrade of the Litecoin network. This upgrade, dubbed Litecoin Core v0.21.3rc3, was a relatively minor release, but it brought a range of bug fixes, security updates, and new features to the network. Investors appear to be particularly enthusiastic about some aspects of the security upgrades that will make attacks against the Litecoin network much more difficult to carry out.
Internet Computer's rise appears to be tied to a recent announcement from DFinity's CEO that blockchain-based AI smart contracts will be coming to the Internet Computer network. This development appears to be the first of its kind in the AI world, with Internet Computer looking to create an entire new AI framework and allow developers to begin building AI-based applications using these smart contract models. The network will be implementing "Single Instruction, Multiple Data (SIMD) instructions, promising a leap in performance metrics," according to an article on CoinGape.
On the topic of artificial intelligence, Near Protocol presented at Nvidia's (NVDA 6.18%) recent GTC conference, outlining some of the key AI-related advancements the crypto network has been making. The team's leaders unveiled how its Near Tasks marketplace will leverage AI training functionality within the network's blockchain operating system, allowing users to be rewarded in Near tokens for performing simple tasks. This network has seen a marked uptick in monthly transaction activity, with roughly 130 million transactions in February, making Near Protocol the third-most active network in the crypto world.
What now?
These three crypto projects are benefiting from a range of token-specific tailwinds, as well as the macro environment. It's important to reflect on the reality that these announcements, whether related to upgrades or AI-related catalysts, would have done little to move the needle in terms of valuation during the crypto winter. But during this period of high investor interest, it's full steam ahead for these projects, and such announcements are generating buzz that may be considered frothy to some.
I have to say, these three cryptos are certainly ones I'm paying attention to, but not necessarily tokens I'd put in the blue-chip category. There's still a significant amount of risk in buying them at their current levels.
That said, for those looking to take advantage of this recent surge of optimism around AI-related crypto projects and those with innovations and fundamental drivers worth considering, these are three cryptos to keep an eye on right now.
