The intersection of AI and crypto might be the most exciting sector heading into 2025.
While this topic has been cooking for some time, the recent Terminal of Truth hype might have kicked off the next big wave.
Right now, we’re seeing early signs of rotation into AI. However, the real upside could still be ahead.
Therefore, if you’re looking for the sector that could define this bull run, you shouldn't overlook AI.
In this post, we’ll break down the following aspects
The current state of the AI sector.
Why AI x Crypto has massive potential.
Key verticals driving growth.
My Top 3 AI crypto picks.
Let’s dive in.
Why AI is the Opportunity of the Decade
First, the global AI market is growing incredibly fast, and AI has already conquered many parts of our lives (guess who's doing the QA of my newsletters ;).
Between 2023 and 2024 alone, the AI market expanded by approximately $50 billion. Let that number sink!
With a projected compound annual growth rate (CAGR) of 28.5%, the AI market is expected to exceed $826 billion by 2030.
If decentralized AI captures just % of this market, it would be worth $600 billion. Applying a speculative 2x premium, the sector’s value could soar to $1.2 trillion.
Despite these growth indicators, AI remains underrepresented in the crypto market.
According to CoinGecko, AI is only the 34th-ranked sector by market cap, trailing behind DeFi, liquid staking, and even meme coins. Yet, AI has dominated crypto mindshare, accounting for nearly a third of all attention in the space.
This disparity presents a massive opportunity. If AI can rise to the top 5-10 sector, repricing many mid- and low-cap AI tokens could deliver 5-10x returns in a relatively short period.
My Bullish Thesis on AI x Crypto
As discussed in one of my latest interviews with Lily Liu (dropping soon), the president of Solana highlighted the immense potential of merging AI with blockchain technology. This synergy could drive innovation and adoption at an unprecedented scale.
Here are some more facts about why I’m convinced that AI crypto is poised for significant growth:
AI’s Ubiquity in Society
Everyone—from skeptics to enthusiasts—recognizes AI’s profound impact. Whether it’s excitement, fear, or curiosity, AI is firmly embedded in public consciousness. This ensures sustained attention and growing interest in the sector.Constant Innovation
The AI space evolves rapidly, with new products and breakthroughs regularly capturing headlines. In crypto’s attention-driven economy, every major AI development fuels speculative interest.Accessibility of Crypto
For retail investors, crypto offers an easy, fractionalized way to gain exposure to AI’s growth. Compared to traditional AI equities, crypto provides lower barriers to entry and greater accessibility, making it an attractive option.The Rise of AI Agents
The emergence of AI agents has showcased the transformative potential of AI x crypto. Though we’re only scratching the surface, these tools could redefine how users engage with DeFi, trading, and risk management. Imagine AI agents autonomously managing portfolios on-chain—that’s the future we’re moving toward.Mainstream AI Adoption
From Adobe to Expedia, major corporations are integrating AI into their operations. This growing adoption highlights the scalability and utility of AI across industries, driving further interest and investment in AI infrastructure.
The AI x Crypto Landscape
The AI and crypto space spans several verticals, each with unique growth potential. Key areas include:
AI Agents and Agent Infrastructure
AI-powered tools that can interact with blockchain protocols, enabling decentralized applications to scale and innovate.Computation and DePIN (Decentralized Physical Infrastructure Networks)
Providing the infrastructure to power AI models and decentralized networks.Decentralized LLMs (Large Language Models)
AI models hosted on decentralized networks, offering secure, scalable alternatives to centralized providers.AI-Specific Blockchains
Protocols designed to support AI applications, enhancing efficiency and usability for developers.
A Glimpse On Parts Of My AI Crypto Portfolio
I have built a diversified crypto x AI portfolio for a few months. Right now, it contains 10-12 coins from all the sectors discussed above. Today, I want to reveal three of my biggest bets. As always, this is not financial advice!
$TAO (Bittensor): A leader in decentralized AI research. With EVM compatibility, $TAO has expanded its potential use cases, enabling DeFi ecosystems to flourish.
$NEAR (Near Protocol): The premier Layer 1 x AI play has offered robust scalability and unmatched uptime since its main net launch in 2020.
$DEAI (Zero1 Labs): A pick-and-shovel AI infrastructure protocol focused on secure data governance with FHE encryption. With a market cap of ~$76M, $DEAI offers significant upside potential.
Final Thoughts
The convergence of AI and crypto is only just beginning. With its massive TAM, sustained innovation, and increasing accessibility, AI x crypto could become one of the defining narratives of the next bull run.
Focusing on key infrastructure projects and staying ahead of market rotations can yield immense potential for outsized returns.
What’s your take on AI’s role in crypto’s future? Let me know your thoughts!
