According to analyst Miles Deutscher, artificial intelligence (AI) is steadily emerging as one of the most transformative narratives in the crypto space.
In a recent X thread, Deutscher laid out his bullish case for AI-integrated crypto projects. He highlighted the potential for significant growth as the sector gains traction within decentralized ecosystems and broader financial markets.
Why AI-Powered Crypto Is Poised for Growth?
Deutscher highlighted the immense opportunity in the AI sector, citing forecasts that put the global AI total addressable market (TAM) at $12 trillion in the next six to seven years. So if decentralized AI captures just 5% of that market, the valuation could reach $600 billion, a 15x growth from current levels.
Adding in speculative premiums, the analyst estimated the sector’s potential at $1.8 trillion, representing a 45x opportunity. Despite the attention AI has garnered, Deutscher noted that AI-focused crypto projects are still underrepresented, ranking 34th by market cap among crypto sectors. With the growing interest, he predicts that AI could enter the top 10 crypto sectors next year.
Deutscher’s thesis revolves around four main factors driving crypto adoption in AI.
First, mainstream awareness, as public interest around AI's social impact fuels mass interest.
Second, driving innovation with regular AI product launches keeps the industry visible. This aligns with the crypto attention economy.
Third, low barriers of entry, as crypto offers an accessible and cost-effective way for retail investors to participate in the growth of AI compared to traditional stocks.
Finally, the synergy between AI and crypto is showcased by the emergence of autonomous AI agents capable of executing on-chain transactions and portfolio management.
This, according to Deutscher, highlights the practical integration of AI into blockchain technologies.
The expansion of the AI sector continues to attract global attention, and its integration with blockchain is poised to reshape both industries.
Performance of AI Cryptocurrencies. Source: CoinGecko
Analyst's Top Picks for 2025
Deutscher has revealed its top AI-focused cryptocurrencies, emphasizing infrastructure and “pick-and-shovel” approaches across multiple AI verticals:
Bittensor (TAO): A leader in decentralized AI research, TAO has been embraced in scientific circles. Recent compatibility with the Ethereum Virtual Machine (EVM) positions it for further expansion.
Near Protocol (NEAR): An established L1 blockchain that integrates AI capabilities, NEAR combines reliability with innovation, maintaining 100% uptime since launch.
Grass (GRASS): GRASS connects real-world data with AI-powered crypto applications, enjoying strong community support following a successful airdrop.
Spectral (SPEC): SPEC focuses on AI agent infrastructure, enabling autonomous and personified agents to trade and interact on-chain.
Deutscher emphasized that many of his choices are “pick-and-shovel” approaches, protocols that enable the development and deployment of AI-based tools. These include computing infrastructure, decentralized LLMs, and AI-focused blockchains. He argued that these foundational layers will underpin the next wave of innovation and adoption in both sectors.
Mainly, we have AI Agents and Agent Infrastructure, Compute and DePIN, Decentralized LLMs, and AI Blockchains/Infra for AI dApps. I am investing in all these verticals, with a particular focus on Agent/AI Infrastructure, he added.
While Deutscher is optimistic, he acknowledged the varying risk profiles of the projects he highlighted. He emphasized the importance of due diligence, especially for smaller-cap tokens with higher upside potential but also higher volatility. For investors, balancing exposure between large- and small-cap projects is essential.
The article Decentralized AI Could Capture $1.8 Trillion Market, Says Analyst appeared first on BeInCrypto Brazil.
