Researchers in Germany found that the launch of ChatGPT had a significant impact on AI-related cryptocurrencies, despite an overall bear market.
A recent study conducted by researchers at the Blockchain Research Lab in Hamburg, Germany indicates that OpenAI’s launch of ChatGPT represented a rising tide scenario for cryptocurrency assets related to artificial intelligence (AI).
Launched in November of 2022, ChatGPT quickly became one of the fastest-growing web platforms in history, eclipsing 1 million daily users in just five days and reaching the 100 million monthly users mark by January 2023. As of June 2023, it’s difficult to tell exactly how many monthly users the app now serves — OpenAI hasn’t disclosed any official user statistics — but some reports suggest that number may be as high as 1 billion.
The app’s popularity apparently had a follow-on effect for all things AI, with cryptocurrency being no exception. According to the researchers:
“The ChatGPT launch had a significant impact on the performance of AI-related crypto-assets, despite the overall cryptocurrency market being in a bearish state and risk-averse investor appetites. Using synthetic difference-in-differences, we found average price increases of at least 10.7% (35.5%) in the one-month (two-month) period following the launch.”
While 10.7% and 35.5% represented the floor for price increases over one- and two-month periods, the ceiling rose to 15.6% and 41.3%, respectively.
The research cites media and marketing hype and public sentiment as factors in the rise, concluding that “investors perceived AI-related crypto assets as possessing heightened potential or value after the launch.”
Per the study, these factors may have contributed to institutional investors shifting funding toward big-tech AI projects. The researchers suggest this shift may have resulted in retail investors following suit and investing in cryptocurrencies both directly and indirectly related to the AI space.
The researchers also speculate that ChatGPT’s capabilities as an educational tool may have “fostered information diffusion effects within the cryptocurrency market by equipping retail investors with the capacity to distill complex and technical concepts, thus facilitating more informed investment decisions”
Cryptocurrency assets unrelated to AI continued a sideways trend during the same period, capping off a slump that began in the second quarter of 2022. Sentiment remains low as of June 2023, with Google searches for “crypto” having plummeted to their lowest level since 2020.