According to Nassim Taleb, cryptocurrencies are losing popularity as many of their ardent supporters shift their enthusiasm towards artificial intelligence (AI). In a recent tweet, the author of “The Black Swan” observed that the once-booming crypto trend is starting to wane, with a particular demographic of tech-savvy young adults, often associated with spending long hours in their parents’ basements, now becoming enamored with the potential of AI.
Taleb’s remark, “You need another infatuation to displace an infatuation,” underscores the cyclic nature of trends, where new and exciting technologies can replace the spotlight on existing ones.
As evidence of the shift away from cryptocurrencies, recent market movements have shown that while Bitcoin experienced a 79% surge in value this year, it has also undergone a 5% decline over the past week, according to CoinMarketCap data. Similarly, other tokens like Ether, Cardano’s ADA, and Solana’s SOL initially rebounded strongly in 2023, but have since declined by percentages ranging from 5% to 11% during the last week.
Meanwhile, the interest in AI among investors has surged this year, driven by expectations that AI technology will drive productivity gains and bolster the profits of tech companies. Notably, Nvidia shares have seen a remarkable upswing, tripling in value and propelling the graphics-chip manufacturer’s market capitalization to an impressive $1.2 trillion.
Tesla, under the visionary leadership of CEO Elon Musk, has also witnessed substantial growth, more than doubling in value, as the company continues to promise advancements in self-driving cars and humanoid robots. Microsoft, too, experienced a 45% surge in its stock price, reaching a record high, partly attributed to its $10 billion investment in OpenAI, the parent company of ChatGPT.
Crypto Critique: Taleb’s Skepticism
Taleb, a former hedge fund manager, has been consistently skeptical about cryptocurrencies as investment assets. He has disparaged Bitcoin as a “cult” and argued that it fails to fulfill the roles of a safe haven asset or a practical medium of exchange. Furthermore, he humorously noted that Bitcoin’s traceable nature renders it unsuitable for money laundering.
While Taleb has expressed his reservations about crypto assets, he also raised concerns about the overvaluation of stocks relative to interest rates, which have experienced a notable surge from nearly zero to above 5% since early last year. In February, he warned about the potential for a widespread price collapse, making the analogy that “Disneyland is over.”
In conclusion, Nassim Taleb’s remarks highlight the shifting interests in the financial and tech realms, as cryptocurrencies lose their previous allure while AI takes center stage, attracting both investors and the younger generation seeking the next technological infatuation.