The release of Elon Musk’s new AI chatbot Grok has triggered an explosion of speculative cryptocurrency tokens seeking to cash in on the hype. In just one weekend, nearly 400 different “GROK” tokens were anonymously created on platforms like Ethereum.
But what are they and are they worth trading? Well, there are plenty of reasons to stay away if you’re not prepared to make a swift exit.
On Saturday, November 4, 2023, the eccentric billionaire Elon Musk unveiled Grok – an AI chatbot with a “rebellious streak”. Grok is designed to challenge popular AI chatbot ChatGPT, which has taken the world by storm in recent months.
According to Musk, Grok has been in development by his new company xAI and has access to posts on X, the social media platform formerly known as Twitter which Musk now owns. Musk revealed that Grok will initially be available only to premium subscribers on X, before eventually being released to the wider public.
However, as with all events adjacent to crypto-world (of which Musk is tangentially a part), quick-fingered individuals have already created a number of tokens with the Grok name. None of them have been claimed by X, Grok or Musk.
Some of these tokens attracted millions in trading volumes and delivered huge short-term gains, letting early investors multiply their money almost overnight. One GROK token on the Base network reached a market cap of $4.56 million with $4.78M in 24-hour trading volumes at the time of writing.
Another GROK token launched on Ethereum rallied over 1300% from its debut, hitting a market cap of over $9 million. There are currently numerous tokens across several chains, including Ethereum, Base, BNB Chain, Pulse and Solana. None of which are endorsed by Grok, X, their teams, or owners.
Grok-mania appears to be another manifestation of the “shitcoin” phenomenon, where tokens are rushed out to exploit buzz around hot topics. Unlike memecoins, which are based on memes like Doge or Pepe the frog , Grok tokens aren’t even purporting to be funny.
However, these Grok-inspired tokens have no inherent utility and lack fundamentals beyond the initial excitement around Grok itself. Their anonymous creators are looking to capitalize on hype rather than building anything of lasting value.
While potentially lucrative in the short term, investing in these assets is undoubtedly risky due totheir uncertain fundamentals. The mania could quickly evaporate once the hype around Grok dies down. We have seen similar market pumps and sudden evaporation of interest with AI tokens, which exploded in popularity earlier in 2023.
As one crypto sector falls out of favor, they simply jump on the next hot trend. For now, the Grok token craze represents the endless creativity of crypto developers to exploit “pump and dump” dynamics. But it’s still uncertain whether any of these tokens can evolve to offer meaningful utility in the long run.