Author: Xiyou, ChainCatcher
Editor: Nianqing, ChainCatcher
In 2024, the "Crypto+AI" field achieved unprecedented breakthrough growth. At the beginning of the year, it was composed of only a handful of projects, but it has now become an independent track in the crypto market that cannot be ignored.
According to the latest整理 data from ChainCatcher, on December 7, the total market capitalization of the Crypto AI sector surpassed $70 billion, accounting for as much as 2% of the entire crypto market, with an annual growth rate reaching 400%.
At the same time, the number of Crypto AI projects has also shown explosive growth, currently exceeding 600, covering various categories such as decentralized AI infrastructure and AI Dapps.
Looking back at 2024, the narrative of Crypto AI underwent several significant changes. At the beginning of the year, the Sora project launched by OpenAI ignited a hype in the Crypto AI infrastructure. Subsequently, the annual NVIDIA AI conference brought decentralized GPUs into the market spotlight, as investors began to flock to decentralized AI infrastructure. By mid-year, the Crypto AI track welcomed an investment boom, with crypto VC institutions eagerly laying out plans, and numerous crypto projects receiving funding support, accelerating the research and application processes of technology. By the end of the year, the explosive growth of the AI Agent Meme pushed the narrative of Crypto AI to new heights.
The total market capitalization of Crypto AI assets exceeded $70 billion this year, with the number of related projects exceeding 600.
According to the latest data from CoinMarketCap, the number of tokens in the Crypto AI sector has reached 355, with a total market capitalization exceeding $70 billion on December 7, peaking at $70.42 billion. Currently, influenced by the overall downtrend in the crypto market, as of December 23, the total market capitalization of the Crypto AI sector has dropped to $47 billion, with a 24-hour trading volume still reaching $5 billion.
Looking back at the beginning of the year, the total market capitalization of the Crypto AI sector was only $17 billion. In less than a year, its total market capitalization has increased by over 400%, once again demonstrating the vigorous development and enormous potential of the Crypto AI field.
Daniel Cheung, co-founder of Syncracy Capital, expressed his views on December 12, noting that although the current Crypto AI sector accounts for only about 1% of the total market capitalization of the crypto market, with the continuous evolution of market cycles and the strong momentum of AI infrastructure and AI Agents, he predicts that the market capitalization of this sector is expected to achieve a tenfold increase.
It is worth mentioning that although the overall crypto market has receded, the total market capitalization of the entire crypto market reached $3.4 trillion on December 23, while the market capitalization of Crypto AI assets still accounted for nearly 1.4% of the entire market at that time (with a peak period exceeding 2%), further demonstrating its future market growth potential.
2024 can be seen as a pivotal year for the Crypto AI field, transitioning from emerging visibility to full-scale explosion. At the beginning of the year, the Crypto AI track was still in its infancy, with only a handful of projects, primarily represented by decentralized GPU projects like Render (RNDR), AI infrastructure like Fetch.ai (FET), and WorldCoin. However, in less than a year, the Crypto AI field has been subdivided into multiple niches, covering decentralized GPUs, AI data platforms, AI infrastructure, and AI Agents among several branches, with projects numbering in the hundreds.
According to the crypto data platform Rootdata, the number of crypto projects containing AI entries has exceeded 600, and this number continues to rise.
2024 Crypto AI Catalysts: OpenAI narratives and other external forces, strong VC investments, and the explosion of AI Agent Meme.
From the data trend of the total market capitalization of Crypto AI assets, the growth in 2024 shows two significant peaks: the first peak occurred during the period from February to March, while the second occurred after October, ushering in a stronger wave of growth.
During the period from February to March, the growth in the field of Crypto AI was primarily driven by two landmark events in the AI sector that provided a strong stimulus.
In February, OpenAI shocked the world with the release of the "Text-to-Video" large model Sora, a groundbreaking achievement that sparked a revolutionary change in the AI field. At the same time, this event greatly boosted the price of the token WLD of the iris authentication crypto project Worldcoin, led by OpenAI founder Sam Altman, further driving the strong growth of the entire Crypto AI asset sector. During this period, high-quality projects such as the AI model incentive platform Bittensor (TAO) and the AI data platform Arkham (ARKM) began to receive widespread attention from the market, and the rise of these projects further ignited investment enthusiasm in the Crypto AI market, attracting a large number of investors to enter this promising emerging field.
Subsequently, the grand convening of NVIDIA's annual AI conference GTC in March attracted widespread attention worldwide, driving its market value to skyrocket and triggering a hype around GPU chips. At the conference, leading figures in the crypto industry, such as Illia Polosukhin, co-founder of Near, and Jules Urbach, founder of the distributed GPU rendering network Render Network, injected new vitality into the Crypto AI field. These series of events led to a surge of concept projects such as decentralized GPUs, among which the once-popular decentralized io.net was founded at this time.
Since then, Crypto AI has officially developed into an independent track, with projects such as AI infrastructure, decentralized GPUs, and decentralized AI data springing up like mushrooms after rain, bringing more choices and opportunities to the market.
In October, the growth in the Crypto AI field was mainly attributed to the explosive emergence of the AI Agent Meme. The launch of the AI Agent project Truth Terminal's token GOAT triggered a wave of hype surrounding the issuance of AI Agent Meme tokens, leading to the mass issuance of nearly a hundred AI Agent Meme coins. This trend allowed AI Agents to rapidly rise and grow into an independent segment of the Crypto AI field, with products covering AI Agent Meme coins, AI Agent issuance platforms (IAO), and the underlying infrastructure for AI Agents, with specific projects available in ChainCatcher's analysis released in November (Systematic Analysis of the AI Agent Track: AI Meme, Issuance Platforms, and Infrastructure). According to Coingecko data, as of December 23, the total market capitalization of AI Agent track tokens has reached $9.8 billion, accounting for about 20% of the total market capitalization of the entire Crypto AI sector ($47 billion), and the hype continues.
If the text-to-video tool Sora launched by OpenAI, the rise in NVIDIA's market value, and the AI summit it hosted constitute strong external drivers for the development of the Crypto AI field, then the explosive growth of the AI Agent Meme is undoubtedly a fire ignited internally within the crypto market, accelerating the rise of this field. Under the combined effect of internal and external catalytic effects, the Crypto AI track has rapidly become a key area in the crypto world that cannot be ignored, with its significance becoming increasingly prominent.
Additionally, in 2024, the Crypto AI market ushered in an unprecedented investment boom, with major investment institutions vying to enter, and investment amounts soaring sharply. In this field, top venture capital institutions in the crypto industry, such as Grayscale, Delphi Venture, Coinbase Ventures, Binance Labs, and a16z, have all actively laid out "Crypto+AI" projects.
Among them, Delphi Ventures expressed high optimism about the combination of Crypto and AI at the beginning of the year and invested in several related projects, such as io.net, OG Labs, and Mythos Ventures. a16z raised a new fund of $6 billion, focusing on investments in the AI sector, and selected five crypto AI projects in its fall crypto startup accelerator. As we entered the second half of the year, institutions such as Pantera Capital, Grayscale, Binance Labs, and Coinbase Ventures announced their entry into the Crypto AI field, establishing dedicated funds or increasing their investment efforts. According to a report released by Messari, in the third quarter of 2024, crypto venture capital institutions injected over $213 million into AI projects, a quarter-on-quarter increase of 250% and a year-on-year increase of 340%.
For specific actions and details of various crypto institutions in the Crypto AI field, refer to ChainCatcher's previously published report (2024 Crypto Venture Capital AI Layout Analysis: What Projects Have Top VCs such as a16z, Binance, and Coinbase Invested In? | Annual Review)
"Crypto for AI" has a greater market outlook than "AI for Crypto".
Currently, the Crypto AI products on the market can primarily be divided into two major forms: "AI for Crypto" and "Crypto for AI.
The former "AI for Crypto" refers to empowering Crypto with AI, mainly focusing on applying AI technology to crypto products, enhancing user experience or strengthening various product performances by integrating AI elements. For example, using AI for code optimization and security audits: AI technology can automatically detect and analyze the code of Web3 projects, identify potential security vulnerabilities and errors, improving project security and stability; participating in on-chain yield strategies: leveraging AI algorithms to analyze market trends and user behavior, devising more efficient on-chain yield strategies, helping crypto users achieve higher returns; integrating AI chatbots to answer user questions, enhancing user experience; using AI Agents to eliminate barriers in on-chain user experiences, such as automatic trading and asset management, allowing users to participate in the crypto market more conveniently.
"Crypto for AI" focuses on leveraging crypto technology to empower the AI industry, using the unique advantages of blockchain technology to solve or improve certain aspects of the AI industry. For example, the privacy and transparency of blockchain technology can address privacy and security issues in the data collection, processing, and storage processes of AI models; by using tokenized model assets, communities can own or use AI models in a decentralized manner; through blockchain's token technology, idle computing resources can be aggregated to form a computing power market, reducing the costs of AI model training and improving the efficiency of computing resource utilization.
In summary, the essence of Web3 technology lies in its decentralized blockchain infrastructure, which, through the operation of the token economic system, the autonomous execution of smart contracts, and the powerful efficiency of distributed technologies, not only ensures the precise definition of data ownership but also greatly enhances the transparency and efficiency of business models through the incentive model of tokens. This characteristic acts as a remedy for the common problems in the AI industry, such as data opacity and unclear business models, providing an effective solution. This aligns perfectly with the macro concept that "AI aims to enhance production efficiency while Web3 focuses on optimizing production relationships."
Therefore, industry insiders generally agree that "Crypto for AI" shows broader prospects and potential in market application compared to "AI for Crypto". This trend has also prompted more and more insiders from the AI industry to actively seek to leverage crypto technology to tackle the various challenges and problems faced by the AI industry.
Building a Crypto AI ecosystem around the three key elements of AI: data, computing power, and algorithms.
Based on the three core elements driving the development of large AI models: "data, computing power, and algorithms," we can further segment into data, computing power, and algorithm model products that cover infrastructure and applications. Data is the foundation for training and optimizing AI models; algorithms refer to the mathematical models and programming logic that drive AI systems; computing power refers to the computational resources required to execute these algorithms, and these three elements are also necessary conditions for the continuous updating and iteration of models.
The specific product forms within the Crypto AI product ecosystem include the following aspects:
At the data level, Crypto AI data projects encompass data collection, storage, and processing. Firstly, in terms of data acquisition, to ensure the richness and diversity of data, some Crypto AI projects leverage token economic mechanisms to incentivize users to share their private or proprietary data. For instance, the Grass project encourages data providers through a reward mechanism, Sahara AI tokenizes AI data assets and launched a dedicated data market, and Vana provides specialized or customized datasets for AI applications through data pools, etc. In terms of data processing, decentralized data labeling platforms contribute high-quality training datasets for developers, improving the reinforcement learning and fine-tuning mechanisms of AI models, such as Fraction AI (which completed $6 million in financing on December 18), Alaya AI, and Public AI, which provide high-quality training datasets to optimize the reinforcement learning and fine-tuning processes of AI models. As for data storage, solutions like Filecoin and Arweave ensure the security and permanence of data.
At the computing power level, the training and inference execution of AI models cannot be supported without powerful GPU computing resources. With the increasing complexity of AI models, the demand for GPU computing resources has been constantly rising. In the face of challenges such as a shortage of high-quality GPU resources, rising costs, and longer wait times, decentralized GPU computing networks have emerged. These networks create open markets and GPU aggregation platforms, allowing anyone (such as Bitcoin miners) to contribute their idle GPU computing power to execute AI tasks and receive rewards in tokens. Representative projects include Akash, Render, Gensyn, io.net, and Hyperbolic. Moreover, projects like Exabits and GAIB have tokenized physical GPUs, transforming them into financial digital assets on the blockchain, further promoting the decentralization and liquidity of computing power.
At the algorithm model level, the decentralized AI algorithm networks currently on the market essentially form a decentralized AI algorithm service market that connects numerous AI models with different expertise and knowledge. When users pose questions, this market can intelligently select the most suitable AI model to provide answers. Representative products such as Bittensor aggregate various AI models in the form of subnets to deliver high-quality content to users; while Pond selects the most outstanding decentralized models through competition points and incentivizes each model contributor by tokenizing AI models, thus promoting innovation and optimization in AI algorithms.
From this perspective, the current crypto market has built a thriving Crypto AI ecosystem centered around the three pillars of "data, computing power, and algorithms."
What are the benefits for the Crypto AI track in 2025?
However, since the popularity of the AI Agent Meme market in October, AI Agent-related products have become the new favorites in the Crypto AI market, such as Talus Network, which announced the completion of $1.5 million financing with a total of $600,000 in November, officially creating a framework and infrastructure specifically for AI Agents.
Additionally, the surge of the AI Agent Meme has not only ignited a new hype in the Crypto AI track but also shifted the market's focus from the original infrastructure areas of decentralized data, GPUs, etc., to a fervent pursuit of AI Agent applications, such as ai16z's market value surpassing $1 billion, and this trend continues to heat up.
In recent projections for the trends in the crypto industry for 2025 released by multiple institutions, a16z, VanEck, Bitwise, Hashed, Blockworks, Messari, and Framework have all expressed optimism about the development of the crypto and AI markets, particularly noting that AI Agent-related products will experience explosive growth in 2025.
At the same time, the enthusiasm in the external AI sector has also been climbing steadily. On December 23, Elon Musk's AI company xAI announced the completion of a new financing round of $6 billion, directly boosting its valuation to $40 billion, further propelling the prosperity of the AI market.
On the narrative level, OpenAI is undergoing a transition from GPT to general AI Agent. It is reported that OpenAI plans to launch a new AI Agent product called "Operator" in January 2025, which can automatically execute complex operations such as writing code, booking travel, and shopping online. It is expected to trigger another explosion in the AI market, similar to Sora at the beginning of 2024. Additionally, NVIDIA's annual AI summit will also take place in March 2025 and will be a focal point of interest for both the crypto and AI industries.
Every upgrade of large models from AI companies in the Web2 sector like NVIDIA and OpenAI ignites hot topics in the AI track, attracting new funds to flow in, further igniting the Crypto AI track.
In terms of policy, the elected U.S. President Trump has announced the appointment of former PayPal executive David O. Sacks as the head of AI and cryptocurrency affairs at the White House, responsible for guiding government policy in the fields of AI and cryptocurrency. This individual has dual investment experience in the crypto and AI industries, having invested in several crypto and AI companies such as Multicoin, and is naturally expected to influence the policy-making process in the integrated field of crypto and AI.
