Coinbase analyst asserts that AI tokens currently lack substance and are driven primarily by hype

A recent research report from Coinbase suggests that the current hype around AI-related tokens may be excessive, at least in the short and medium term. While the popularity of generative AI has led to the emergence of niche crypto sub-ecosystems, Coinbase analyst David Han is cautious about the long-term sustainability of most AI tokens due to the rapid changes in AI technology. One of the main challenges facing crypto AI projects is the conflict between the decentralization goal of crypto and the reliance on centralized components and data sources in AI. As a result, many projects in this space have struggled to attract investors. However, despite this negative outlook, AI tokens have recently outperformed Bitcoin and major stocks like Nvidia and Microsoft, thanks to market sentiment and positive AI-related news. Coinbase suggests that the crypto AI narrative could gain even more strength as the overall crypto market and the AI sector continue to perform well. However, meaningful adoption of AI in the crypto space will require more than just decentralizing AI components. The AI ecosystem is still in its early stages and needs to develop a comparable alternative to current crypto assets. Moreover, Ethereum co-founder Vitalik Buterin believes that AI could play a crucial role in identifying and fixing bugs in blockchain code. He sees AI-powered auditing as the biggest technical risk to the Ethereum network. Currently, AI tokens have a combined market capitalization of $51.18 billion, serving various AI-based projects and services. Overall, while there is potential for growth in the crypto AI space, there are challenges to overcome in order to achieve meaningful adoption and long-term sustainability.