Tag: Update

Artificial intelligence is also conquering the Web3. What is crypto AI, and what innovations will it introduce?

The fusion of blockchain technology and artificial intelligence is now much more than a trend, primarily since the launch of Chat GPT and other similar services, i.e. since its potential was understood. Less than two years later, many of us use these types of services daily, even if there is a feeling that the current scenario is only the tip of the iceberg. 

AI and cryptocurrencies will most likely become increasingly part of our lives. But can these two technologies work together, and, more importantly, why should they? 

Artificial intelligence and cryptocurrencies

Artificial intelligence has been the key technology of the past two years, and cryptocurrencies and blockchain achieved supremacy, at least in part, during the bull run 2021. The big difference in adoption between these two technologies concerns the user experience, as the currently available examples of AI models are easier to use than blockchain protocols and decentralised applications. However, huge strides have been made in this regard in recent years.

However, the two key technologies of this decade can collaborate, and the crypto AI protocols that have emerged in recent months offer valuable support for this thesis. The convergence of blockchain and artificial intelligence became mainstream when ChatGPT was released. OpenAI’s chatbot was designed to interact with users like in a normal chat conversation with which everyone is familiar. On the other hand, the final consecration came in recent months after the staggering performance of Nvidia’s stock, which was, albeit briefly, the world’s largest company.

Since then, many crypto AI projects have sprung up, while existing ones have attracted attention. Moreover, some key protocols have intercepted and exploited the situation by reorganising and modifying their vision in a manner consistent with the needs of this new market segment. For instance, Filecoin has ridden the hype wave on artificial intelligence by offering itself as a storage service provider for emerging AI companies. Or Near, which is harnessing its large roster of developers to create decentralised, self-modifying AI based on user behaviour.

In short, these technologies can coexist; indeed, it is likely that they will. According to Alexander Good, author and respected Key Opinion Leader (KOL), the capitalisation of crypto AI could reach $2 trillion in the next few years, while Grayscale, the world’s largest crypto investment fund, has just launched its exclusive financial product for this sub-sector.

Decentralised AI models: what problems do they solve?

We can start with a technical assumption to answer the question posed in the subtitle, but don’t worry, nothing too complex. Blockchain and AI models feed off the same power source: computing power. In the same way that miners use powerful machines made up of video cards (GPUs) connected in series, the same computing power is used to train artificial intelligence models to make them increasingly accurate and thus useful. In this sense, crypto AI projects such as Render (RNDR) or Bittensor (TAO) deal with tokenising computing power that can then be exchanged and used by network users. Thanks to this possibility, AI models can become more accessible and decentralised. The immense power of artificial intelligence is, today, concentrated in the hands of large and prosperous companies that own the supercomputers needed to ‘run’ them.

The decentralisation discourse also applies to data indexing, i.e., the process of organising and returning data to users that ‘Chat GPT-style’ chatbots and search engines constantly perform. For instance, a protocol such as The Graph takes on-chain data and organises it, making it readable to users, all decentralised. It also uses Semiotic AI to automate searches within its data containers.

Let us now take a look at the main three objectives of the crypto AI segment and the projects related to them:

• Building decentralised artificial intelligence services and facilitating user access: In this respect, the main project to watch out for is the Bittensor (TAO) mentioned above, a centralised machine learning platform with more than 90,000 users. Through Bittensor, particularly its sub-networks, it is possible to generate texts, translations, and images that are very precise regarding the prompts you enter. In short, it is a fully decentralised GPT Chat with an internal economy that rewards users who secure it and those who use it.

• Solving the main problems encountered by AI platforms, such as the authenticity of information and deep fakes (fictitious videos or photos in which the image of a public figure appears). In this sense, crypto AI projects can exploit the key features of blockchain technology, particularly its decentralised nature, transparency, and immutability, to protect users from these threats. 

• Managing the infrastructure networks and resources required for technology development, particularly storage and GPU computing power. In this sense, the projects that stand out are Filecoin (FIL) and Render (RNDR). As already mentioned, the former allows users to store data through a centralised peer-to-peer cloud-based architecture. This is a perfect solution for emerging artificial intelligence companies.

Render, on the other hand, thanks to its decentralised marketplace for graphics rendering, allows anyone who wants to access the service, whether designers or artificial intelligence models, to do so without having to buy expensive equipment.

Crypto AI: our thematic Moneybox

Now that you know all the main applications of crypto AI and the problems they solve, you just have to discover our new ‘Artificial Intelligence’ Moneybox. We, like Grayscale, intend to enable our clients to gain exposure to this promising sector.

Our Crypto AI cocktail consists of three delicious ingredients: Render (RNDR), The Graph (GRT) and Near (NEAR).

Young Platform’s crypto Moneybox is a separate wallet from the one you normally use to store your cryptocurrencies. It is used to set aside your favourite cryptocurrencies for the long term, avoiding spending them on everyday or frequent transactions. Of course, you also have the option to ‘put your own spin on it’ by creating a Customised Moneybox and choosing up to five cryptos to include and the percentage to distribute on each.

If you want to learn about this functionality, you can consult the guide about Moneyboxes functionality. 

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ECB meeting April 2024: interest rates unchanged

The recent drop in inflation rates in France and Italy has ignited a lively debate about possible moves by the European Central Bank (ECB), with much attention focused on the At the last ECB meeting in April 2024, the Governing Council decided to keep the three key interest rates unchanged.

This decision came despite the recent drop in inflation rates in France and Italy. In fact, the picture in March sparked a lively debate on possible moves by the European Central Bank, pointing to the possibility of an early rate cut. This discussion comes against a backdrop of Europe actively trying to balance economic growth with controlling inflation, a topic of considerable interest to investors, policy-makers, and consumers.

The European panorama

The eurozone witnessed a significant reduction in inflation in 20 nations, which fell to 2.4% in March. This result exceeded analysts’ expectations, who had forecast a stable inflation rate of 2.6%  

This is consistent with the inflation trend, which has shown a steady decline since its peak of 10.6% in October 2022, driven by pandemic disruptions and geopolitical tensions, particularly Russia’s invasion of Ukraine. 

A further decline is therefore encouraging and marks a moment of optimism, which the ECB meeting in April 2024 confirmed. 

Indeed, the Council pointed out that most measures of core inflation are showing signs of easing, with wage growth moderating gradually and companies beginning to absorb some of the increase in labour costs into their profits.

The demand-pulling effects of previous interest rate hikes, together with tight financing conditions, are helping to moderate inflation. Nevertheless, domestic price pressures remain strong, particularly in the service sector, keeping service price inflation at high levels.

Falling inflation in France

In France, inflation slowed to its lowest level since July 2021, with consumer price growth slowing to 2.3% in March from 3.2% in February, according to the national statistics agency. This was well below economists’ forecasts, which expected a figure of 2.8%, signalling a general slowdown in price increases. In particular:

• services inflation dropped to 3%
• that of energy at 3.4% 
• and a significant decrease in food inflation to 1.7 per cent, with fresh food prices falling by 3.9 per cent year-on-year.

Month-on-month inflation data further confirmed the trend, slowing from 0.9% to 0.3%, indicating a considerable easing of inflationary pressures in the eurozone’s second-largest economy.

Falling inflation in Italy

Italy also reported a lower-than-expected inflation rate for March, with consumer prices rising by 1.3% year-on-year, against forecasts of 1.5%. This moderation was attributed to the end of seasonal clothing sales and price increases in transport services, along with a slowdown in falling energy costs.

ECB rate cut decisions

The interest rates on the main refinancing instruments, the marginal lending facility and deposits will remain fixed at 4.50 %, 4.75 % and 4.00 % respectively. 

Furthermore, according to statements given at the press conference following the meeting, the Council believes that inflation levels in the coming months will still fluctuate around current levels. The decline in inflation will not be linear and will therefore have to be assessed on a case-by-case basis. In all likelihood, the target level of 2% will only be reached next year. 

François Villeroy de Galhau, Governor of the Bank of France, hinted at the possibility of a rate cut in June, provided inflation continues to fall faster than expected and the economy remains stagnant. He emphasised the importance of not overburdening economic activity by maintaining a tight monetary policy for a prolonged period.

Speaking at a financial event in Barcelona, Pablo Hernández de Cos outlined a scenario where June could see the start of interest rate cuts by the ECB. As Governor of the Bank of Spain, De Cos’ outlook carries significant weight, highlighting a cautious but optimistic approach to the Eurozone economy.

Wage growth and inflation

Despite encouraging signs of cooling inflation, ECB monetary policymakers remain

Despite encouraging signs of cooling inflation, the ECB’s monetary policymakers remain cautious, particularly as wage growth gradually moderates. Companies are starting to absorb some of the increase in labour costs with their profit margins. 

With service sector inflation down only slightly to an annual pace of 3.9% in February, the central bank is taking a measured approach, probably waiting until June to reassess wage pressures and their potential to bring inflation closer to the target.

Market expectations and ECB position

Analysts believe that the biggest complication could come if the US Federal Reserve delays its policy easing to keep up the fight against inflation. For this reason, they believe the ECB will not cut rates before its big sister. 

To the supporters of this interpretation, ECB President Christine Lagarde replies: ‘We are data-dependent, not Fed-dependent’. She adds, ‘We do not speculate what other central banks might do. (…) Different factors drive inflation in the US and the Eurozone. (…) It cannot be assumed that Eurozone inflation will mirror US inflation.”

After the ECB decision, money markets were pricing about a 70% chance of a 25 basis point rate cut in June, compared to about an 80% chance earlier on Thursday.

Experts such as Carsten Brzeski, global head of macro at ING, suggest that the March inflation data, combined with upcoming information on wage growth and ECB staff forecasts for GDP and inflation, are tilting the narrative towards a first rate cut in June. Kamil Kovar of Moody’s Analytics interprets the latest data as a significant step towards defeating inflation, advocating up to five rate cuts this year.

Perspectives

The ECB’s decision to keep interest rates unchanged and to continue with a measured monetary policy reflects a careful assessment of current economic conditions and the inflation outlook. By committing to a flexible and data-driven approach, the ECB underlines its determination to ensure lasting price stability by balancing the needs for economic growth with its responsibility to keep inflation under control. The ECB’s future moves.will be awaited with great interest, as Europe navigates through complex economic challenges, seeking to ensure a sustainable recovery and long-term stability.

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Experts’ forecasts for the euro-dollar 2024 exchange rate: which currency will be stronger? 

What are the forecasts for the EUR/USD exchange rate in 2024? As always, experts in the currency market and beyond closely monitor the EUR/USD exchange rate. Every movement of the quotation is constantly analysed, as is the continuous strengthening and weakening of one currency against another. For this reason, and because of their interest in the pair, experts make their forecasts on the EUR/USD exchange rate every year. 

Euro-dollar exchange rate: forecast 2024

Before analysing the forecasts on the euro-dollar exchange rate, it is necessary to make a few theoretical clarifications. EUR/USD is the abbreviation for the euro-dollar exchange rate, i.e. the rate that indicates how many dollars are needed to buy one euro. In this currency pair, the euro is the ‘base currency’, and the dollar is the ‘quoted currency’. If, for example, the rate is 1.5, it means that $1.5 corresponds to 1 euro.

Forex investors study the euro-dollar exchange rate, generally used to calculate a currency’s strength. This metric is influenced by central bank monetary policies, such as interest rate rises, and macroeconomic conditions, such as inflation or the bond yield spread between the US and Germany. Specifically, when a central bank raises interest rates, money in circulation decreases, increasing its value.

What do the major investment banks’ forecasts on the euro-dollar exchange rate for 2024 tell us? In general, is the euro expected to continue gaining ground against the dollar, or will we see the opposite scenario?

If you are also interested in digital currencies, Young Platform allows you to check the Euro Bitcoin exchange rate and the rates of the best cryptos on the market. 

Morgan Stanley’s forecasts

According to Morgan Stanley analysts, unlike in 2023, USD will regain lost ground against EUR in 2024.

Their forecast on the euro-dollar exchange rate sees the pair reaching 1 in the coming months. Therefore, the euro’s descent that began at the end of November 2023 will not stop. 

Bank of America and ING

On the other hand, Bank of America (BoA) expects a still relatively strong euro in 2024. The exchange rate estimate is 1.10 and 1.15 in 2024. Several elements could alter these assumptions, but the main one is related to interest rates. BoA analysts think that the Fed’s rate cut, which will take place, again according to them, from June 2024 onwards, will undermine the strength of the dollar. The lower the rates, the more liquidity there should be in the markets, which would favour investments in riskier assets and a drop in demand for the US currency.   

JPMorgan

JPMorgan’s euro-dollar exchange rate forecast from October begins with the realization that the dollar could return strong in 2024 after the crash of 2022/2023.  

The main cause is the war in the Middle East and the possible increase in energy prices. JP Morgan’s forecast for 2024 has a precise price target: 1.00 in the first months of the year. This would translate into a 7% increase in the dollar’s value. 

ABN AMRO Bank

ABN AMRO Bank economists, on the other hand, raised their forecasts for the euro-dollar exchange rate. The bank expects the Federal Reserve and the ECB to start lowering interest rates with the arrival of the New Year. This hypothetical situation would not favour either currency. The exchange rate is expected to settle at 1.05 at the beginning of the year and reach a high of 1.10 in the final quarter.