As AI hype spills into the crypto world, risk-loving South Korean traders have jumped into the market, driving AI token trading to new heights.
Data from research firm Kaiko reveals that South Korea's share of global weekly AI token trading surged from 0.6% in mid-2023 to 18.7% in May. These tokens are typically issued by early-stage projects attempting to apply blockchain technology to AI services.
Moreover, since February, the average weekly trading volume of AI tokens in South Korea has reached $8 billion, a staggering 26-fold increase from the historical low of $300 million in mid-2023.
Many South Koreans have a strong affinity for both AI and cryptocurrencies. Research indicates that roughly 10% of the South Korean population participates in token trading, with smaller, more volatile tokens-not market leaders Bitcoin and Ethereum-making up the bulk of the trading activity.
These smaller tokens are also among the best-performing assets in the crypto market this year.
According to CoinGecko data, the market capitalization of tokens like Fetch.ai, SingularityNET, Akash Network, and Render has more than doubled since the beginning of the year.
Furthermore, data from the Korea Securities Depository shows that Nvidia, the leading AI "pickaxe" provider, and Microsoft, which bet on ChatGPT, are the second and third most popular overseas stocks among South Korean investors this year.
However, given the historical volatility of the crypto market, some question whether the interest in AI tokens will be sustained.
Kaiko analyst Dessislava Aubert stated that while Nvidia is seen as a pure AI investment and the best way to gain exposure to the sector, the investment prospects for AI tokens are less clear.
