Technology skeptics are calling the “AI Bubble” and it reminds me of how in the preceding 4 years, it was crypto that was thought of to be in a bubble.
Certainly, it's too early to rule out that they're done hoping for crypto to burst, Luna and FTX gave them a lot to talk about for quite some time even though the former case was an obvious protocol attack, while the latter was a clear cut fraud that involved a traditional institution, very little to do with crypto as a speculative investment popping, as that's the whole point of the bubble, given the history of the dotcom crisis.
In all honesty, if we want to talk about crypto as a speculative investment, the industry is making investors more money than they are losing, unless of course the degenerates gambling on pump.fun, can't blame anyone for betting on memecoins casino.
VCs and almost everyone else are doing just fine.
There's hard data if you go out of your way to look for it. Bitcoin for instance has been profitable for 3,915 days, that's 10.72 years gearing at a 99.24% running profitability rate for investors.
We most certainly cannot count individual losses so we have to look at it from an industry-wide growth perspective and data supports that crypto has been a steadily growing market.
Would I call it a healthy one? No I wouldn't, volatility makes it quite the opposite, but only because we still have low investment on crypto education and people generally will come in greedy and that's out of our control.
Narratives will control funds flow but it just all circles to sustainable and stable assets, it is why Bitcoin remains dominant and the stablecoins market is growing.
It's too early to call AI or crypto a bubble
There are frankly a lot of reasons why we'll not see the dotcom bubble scale crash. If we want to pull out the data on what unfolded, it would be obvious that crypto hasn't attained the heights required for such a crash, nor has AI.
It's more than just looking at paper values like the approximate $5 trillion that was wiped out of the $36 trillion market at the time. Percentage wise, that's barely 15%.
Just by the data above, it's obvious that you can't rule anything crypto related to a bubble crash because 15% is just a rookie number down here.
That said, when dealing with the stocks market, at the time, $5 trillion is a big deal, in comparison, I'd say that if we crashed below $200 billion industry wide market capitalization, which is essentially 2019 lows, within a short period of time, say 1 - 1.5 years then we can rule it a bubble burst, otherwise, everything else is just a regular Wednesday market swings with crypto.
The biggest reason for this is that VCs and Miners are cashing in every step of the way, there aren't real incentives to lock in more value than they remove periodically, this is why the market cycles exist.
Fund, develop, market, sell, 4 years, repeat.
Now If I move to the AI market, which also happens to be integrating with crypto quite well, it's way too soon to call it a bubble.
First off, most of the AI businesses are not publicly traded companies, what's there to burst?
And some others slapping the “AI” name to their products are just doing that for marketing benefits, nothing AI about an auto replyer bot that's existed a long time coming now.
AI is still valued way under $1 Trillion. Surely the cost could very well be through the roof but that's because effective monetization has kicked in yet.
AI agents are one of those trains that may attract great numbers, revenue-wise. Not because it's such an amazing or impactful product segment but because it's one with the perfect branding right now.
AI agents are essentially robots or simply bots, but kudos to whoever branded it as “agents,” cause now we're going to have numerous private companies building products around sending API calls to ChatGPT.
Surely when I put it like that, it's easy to see why every one of these technology skeptics would think the whole thing is a bubble but they don't seem to understand that unlike the dotcom era, a lot of things are valued and approached more differently and widespread usage and development is how AI breaks into a stronger global market.
AI’s success relies on data and the only way to access quality data is to keep innovating every way possible.
Every single sector out there has to be penetrated before a risk of a bubble burst becomes a valid sentiment because at this point, we would have run out of good data and the market would have been exhausted and bored out of the different AI solutions that would have been dreamed up.
But even with that, the entertainment industry will still be kicking it hard, especially the adult industry.
There are simply just so many areas that need to be covered before Crypto or AI companies run out of ideas and subsequently, resources to scale, and right now, unless we can magically, rapidly pump the crypto and AI markets into a $100 trillion valuation each, then we are very far from being exhausted.