Bitcoin is currently attracting a lot of attention in the virtual currency market. There's a good reason for that. Bitcoin has soared nearly 40% in the wake of the US presidential election and is now up 128% since the beginning of the year. Additionally, the psychologically important price level of $100,000 is within reach.
However, that doesn't mean that other cryptocurrencies aren't rising in value as well. What I'm paying attention to now is Bittensor. (Code:TAO)an artificial intelligence (AI) cryptographic token. It is up 30% in the past 30 days and 137% for the year, and is currently on a par with Bitcoin. So should it be in your portfolio in 2025?
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Bittensor is an open source protocol for creating distributed machine learning networks. Bittensor tokens, known as TAO, are used to buy and sell digital goods within the Bittensor ecosystem. All of these digital goods are AI-related and include computing power, data, machine learning models, and more.
There's clearly a lot to unpack here. The simplest way to think of Bittensor is that it is a digital currency used to purchase AI products and services. Prices for these goods and services are set in TAOs, not dollars. If you wish to purchase these products or services, you will need a TAO.
As the total value of the Bittensor AI ecosystem increases, the value of this currency increases. This helps explain why Bittensor's value has skyrocketed over the past 18 months. In March 2023, the TAO token was worth just $100. It's now worth over $650, giving you a whopping 550% return. That can be thanked for the rapid growth of AI.
Bitensor represents the fusion of AI and cryptocurrency. This is a powerful concept, outlined by Ark Invest's Cathie Wood in her 2024 “Big Ideas” report. As she points out, blockchain technology and artificial intelligence are two of the five most important technologies in the world today. If the two converge, it will lead to a significant increase in economic value.
In fact, Cathie Wood even believes that the technological fusion of AI and blockchain could cause a “tectonic shift” similar to that which occurred during the First and Second Industrial Revolutions. There is. So it's understandable why crypto investors are excited about Bittensor right now. The convergence of AI and cryptocurrencies could cause their value to skyrocket.
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Recently, some crypto traders have started referring to Bittensor as “Bitcoin for AI.” This suggests that Bittensor could eventually become the premier digital currency used to power the AI economy.
Image source: Getty Images.
The idea of creating a digital currency for AI is something that Cathie Wood has also considered. As she pointed out last year, using dollars to pay for AI-based goods and services is inefficient. We need a digital currency that AI bots can use and trade. She thinks Bitcoin will be that currency.
Indeed, it's easy to scoff at the notion that Bittensor is “Bitcoin for AI.” This sounds like the type of marketing fluff commonly seen in Silicon Valley, where startups are trying to attract venture capitalist funding. That's right, we are “Netflix for X.” Or, we are “Airbnb for Y.”
But here's the problem. Bittensor actually shares some characteristics with Bitcoin. Like Bitcoin, it is mined using computing power and electricity. And, like Bitcoin, Bittensor's lifetime supply is limited to 21 million coins. This creates an inherent scarcity, especially considering that the coin supply of many cryptocurrencies is in the billions or even trillions.
Over time, this scarcity could theoretically help drive up Bittensor's price. As the Bittensor ecosystem grows, the demand for TAO tokens will also grow. As long as demand exceeds supply, prices should rise over time.
Investors have options when it comes to investing in AI crypto tokens. Looking at the top 100 cryptocurrencies ranked by market capitalization, there are 10 different AI crypto tokens worth considering. In other words, Bittensor is not the only way to realize the investment theory of “integration of AI and virtual currency''.
Moreover, there is no easy way to invest in Bittensor. Unlike Bitcoin, there are no spot crypto exchange traded funds (ETFs) that can be bought and sold. You need to enter the spot cryptocurrency market yourself and invest directly. And you may still have a hard time purchasing one. For example, it is currently not available for trading on Coinbase Global.
Bitensor is not for everyone. This should only be considered as a highly speculative investment. Since its upside potential is tied to the fate of AI, Bittensor's value could fall if the AI investment trend stalls. That being said, I have this cryptocurrency on my investment radar for 2025.
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Dominique Basurto has a position in Bitcoin. The Motley Fool has positions in and recommends Airbnb, Bitcoin, and Netflix. The Motley Fool has a disclosure policy.
Up 137%, should you include this hot artificial intelligence cryptocurrency in your portfolio in 2025?Originally published by The Motley Fool
