Author: Xiyou, ChainCatcher
Editor: Nianqing, ChainCatcher
In 2024, the "Crypto+AI" (Encrypted AI) field achieved unprecedented breakthrough growth. At the beginning of the year, the field was only composed of a few projects, but now it has become an independent track that cannot be ignored in the cryptocurrency market.
According to the latest data compiled by ChainCatcher, the total market value of the Encrypted AI sector has exceeded $70 billion as of December 7th, accounting for the highest proportion of 2% in the entire cryptocurrency market, with a year-on-year growth rate of 400%.
At the same time, the number of Encrypted AI projects has also shown explosive growth, currently exceeding 600, covering decentralized AI infrastructure, AI Dapps and other categories of products.
Reviewing 2024, the narrative of Encrypted AI has undergone several major changes. At the beginning of the year, the launch of the Sora project by OpenAI ignited the hype of the Encrypted AI infrastructure. Subsequently, the holding of Nvidia's annual AI conference GTC further pushed the decentralized GPU to the focus of market attention, and investors began to chase after the decentralized AI infrastructure. In the middle of the year, the Encrypted AI track welcomed an investment boom, with many crypto VC firms announcing their involvement, and numerous crypto projects receiving funding support, accelerating the research and application process. By the end of the year, the outbreak of the AI Agent Meme has pushed the narrative of Encrypted AI to a new climax.
The total market value of Encrypted AI assets exceeded $70 billion this year, with more than 600 related projects
According to the latest data from CoinMarketCap, the number of Tokens included in the Crypto*AI sector has reached 355, and its total asset value has exceeded $70 billion as of December 7th, with a peak of $70.42 billion. Currently, affected by the overall downward trend in the cryptocurrency market, as of December 23rd, the total market value of the Encrypted AI sector has fallen back to $47 billion, with a 24-hour trading volume still as high as $5 billion.
Reviewing the beginning of the year, the total market value of the Encrypted AI sector was only $17 billion. In less than a year, the total asset value of this sector has increased by more than 400%, once again demonstrating the vigorous development and huge potential of the Encrypted AI field.
On December 12th, Daniel Cheung, co-founder of Syncracy Capital, pointed out that although the Encrypted AI sector currently only accounts for about 1% of the total cryptocurrency market value, with the continuous evolution of the market cycle and the strong momentum of AI infrastructure and AI Agent, he predicts that the market value of this sector is expected to grow 10-fold.
It is worth mentioning that although the current cryptocurrency market has generally declined, on December 23rd, the total market value of the entire cryptocurrency market reached $3.4 trillion, and the market value of Encrypted AI assets still accounted for nearly 1.4% of the entire market (the peak market share exceeded 2%), further demonstrating its future market growth potential.
2024 can be considered a key turning point for the Encrypted AI field to transition from emerging to full-blown. At the beginning of the year, the Encrypted AI track was still in the germination stage, with only a few projects, mainly represented by the decentralized GPU project Render (RNDR), the AI infrastructure Fetch.ai (FET) and WorldCoin. However, in less than a year, the Encrypted AI field has been able to be divided into multiple sub-tracks, covering decentralized GPU, AI data platform, AI infrastructure and AI Agent, with hundreds of projects.
According to the crypto data platform Rootdata, the number of crypto projects containing the AI keyword has exceeded 600, and this number is still increasing.
2024 Encrypted AI Catalysts: OpenAI Narrative and External Forces, VC Deployment, AI Agent Meme Outbreak
From the data trend of the total market value of Encrypted AI assets, the growth in 2024 showed two significant peaks: the first peak occurred between February and March, while the second occurred after October, ushering in a stronger growth wave.
During the period from February to March, the growth of the Encrypted AI field was mainly due to the strong stimulation brought by two landmark events in the AI field.
In February, OpenAI shockingly released the "text-to-video" large model Sora, a breakthrough achievement that triggered a disruptive revolution in the AI field. At the same time, this event also greatly boosted the price of the token WLD of the iris authentication cryptocurrency project Worldcoin led by OpenAI founder Sam Altman, thereby driving the strong growth of the entire Encrypted AI asset sector. During this period, quality projects such as the AI model incentive platform Bittensor (TAO) and the AI data platform Arkham (ARKM) began to receive widespread market attention, and the rise of these projects further ignited the investment enthusiasm in the Encrypted AI market, attracting a large number of investors to enter this promising emerging field.
Subsequently, the grand opening of Nvidia's annual AI conference GTC in March once again attracted widespread global attention and led to a surge in its market value, triggering a GPU chip speculation frenzy. At the conference, the appearance of crypto industry leaders such as Near co-founder Illia Polosukhin and the founder of the distributed GPU rendering network Render Network, Jules Urbach, once again injected new vitality into the Encrypted AI field. This series of events led to the emergence of decentralized GPU concept projects like io.net, which had once been a sensation.
Since then, Encrypted AI has officially developed into an independent track, with AI infrastructure, decentralized GPU, and decentralized AI data projects emerging one after another, bringing more choices and opportunities to the market.
In October, the growth of the Encrypted AI field was mainly attributed to the outbreak of the AI Agent Meme. The sudden appearance of the AI Agent project token GOAT of Truth Terminal triggered a frenzy of AI Agent Meme project token issuance, leading to the launch of nearly a hundred AI Agent Meme coins. This trend has led to the rapid rise of AI Agent as an independent sub-track within the Encrypted AI field, with products covering AI Agent Meme coins, AI Agent issuance platforms (IAO) and AI Agent underlying infrastructure, and specific projects can be found in the "Systematic Sorting of the AI Agent Track: AI Meme, Issuance Platform and Infrastructure" released by ChainCatcher in November. According to Coingecko data, as of December 23rd, the total market value of AI Agent track tokens has reached $9.8 billion, accounting for about 20% of the total market value of the entire Encrypted AI track (470 billion dollars), and the speculation heat is still ongoing.
If OpenAI's release of the text-to-video tool Sora, Nvidia's market value surge and its AI summit, etc. constitute the external strong driving forces for the development of the Encrypted AI field, then the explosive growth of the AI Agent Meme is undoubtedly the internal ignition in the crypto market, accelerating the rise of this field. Under the joint catalytic effect of internal and external forces, the Encrypted AI track has quickly become a key area in the crypto world that cannot be ignored, and its importance is becoming increasingly prominent.
In addition, in 2024, the Encrypted AI market welcomed an unprecedented investment boom, with various investment institutions rushing in, and investment amounts soaring. In this field, top-tier crypto venture capital firms such as Grayscale, Delphi Venture, Coinbase Ventures, Binance Labs and a16z have all actively deployed "Crypto+AI" projects.
Here is the English translation of the text, with the specified terms retained and not translated:Among them, Delphi Ventures expressed high expectations for the combination of Crypto and AI at the beginning of the year, and invested in multiple related projects, such as io.net, OG Labs, and Mythos Ventures. a16z also raised a new $6 billion fund, focusing on investing in the AI field, and selected 5 crypto AI projects in its fall crypto startup accelerator. In the second half of the year, institutions such as Pantera Capital, Grayscale, Binance Labs, and Coinbase Ventures also announced their entry into the crypto AI field, establishing dedicated funds or increasing investment efforts. According to a report released by Messari, in the third quarter of 2024, crypto venture capital firms injected over $213 million into AI projects, an increase of 250% quarter-on-quarter and 340% year-on-year.
The specific deployment actions and details of various crypto institutions in the crypto AI field can be found in the article "2024 Crypto VC AI Layout Analysis: Which Projects Did a16z, Binance, Coinbase, and Other Top VCs Invest In? | Annual Review" published by ChainCatcher.
"Crypto for AI" has greater market prospects than "AI for Crypto"
Currently, the crypto AI products on the market can be mainly divided into two 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 product performance by integrating AI elements. For example, using AI for code optimization and security auditing: AI technology can automatically detect and analyze the code of Web3 projects, find potential security vulnerabilities and errors, and improve the security and stability of the projects; participating in on-chain yield strategies: using AI algorithms to analyze market trends and user behavior, formulate more efficient on-chain yield strategies, and help crypto users achieve higher returns; integrating AI chatbots to answer user questions and improve user experience; using AI agents to eliminate barriers in the on-chain user experience, such as automatic trading and asset management, so that users can more conveniently participate in the crypto market.
"Crypto for AI" focuses on empowering the AI industry with crypto technology, 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 solve the privacy and security issues in the process of AI model data collection, processing, and storage; through the use of model tokenization, the community can own or use AI models in a decentralized way; through the Token technology of blockchain, idle computing resources can be aggregated to form a computing power market, reducing the cost of training AI models and improving the utilization efficiency of computing resources.
In summary, the essence of Web3 technology lies in its decentralized blockchain infrastructure. Relying on the operation of the Token economic system, the autonomous execution of smart contracts, and the powerful efficiency of distributed technology, it not only ensures the precise definition of data ownership, but also greatly improves the transparency and efficiency of business models through the incentive mechanism of Tokens. This feature is just the right medicine for the common problems in the AI industry, such as data opacity and unclear business models, providing an effective solution path. This is in line with the macro concept that "AI aims to improve production efficiency, while Web3 focuses on optimizing production relations".
Therefore, industry insiders generally reach a consensus: "Crypto for AI" has a broader prospect and potential in market application compared to "AI for Crypto". This trend has also prompted more and more AI industry insiders to actively seek to use crypto technology to overcome the various challenges and difficulties facing the AI industry.
Building a crypto AI ecosystem around the three key elements of "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 subdivide them into data, computing power, and algorithm model products covering infrastructure and applications. Among them, data is the foundation for training and optimizing AI models; algorithms refer to the mathematical models and program logic that drive AI systems; and computing power refers to the computing 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 in the crypto AI product ecosystem include the following aspects:
At the data level, crypto AI data projects cover the collection, storage, and processing of data. First, in terms of data acquisition, in order to ensure the richness and diversity of data, some crypto AI projects use Token economic mechanisms to incentivize users to share their personal or proprietary data, such as the Grass project using reward mechanisms to encourage data providers, Sahara AI tokenizing AI data assets and launching a dedicated data market, and Vana forming data pools to provide specialized or customized data sets for AI applications. In terms of data processing, decentralized data annotation platforms have contributed high-quality training data sets to developers, thereby improving the reinforcement learning and fine-tuning mechanisms of AI models, such as Fraction AI (completed $6 million in financing on December 18), Alaya AI, and Public AI, providing developers with high-quality training data sets to optimize the reinforcement learning and fine-tuning of AI models. As for data storage, solutions like Filecoin and Arweave ensure the security and persistence of data.
At the computing power level, the training and inference execution of AI models requires the support of powerful GPU computing resources. As the complexity of AI models continues to increase, the demand for GPU computing resources is also constantly rising. Facing the challenges of insufficient supply of high-quality GPU resources, rising costs, and longer waiting times in the market, 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. Furthermore, projects like Exabits and GAIB have even tokenized physical GPUs, converting them into on-chain financial digital assets, further promoting the decentralization and liquidity of computing power.
At the algorithm model level, the current decentralized AI algorithm networks are essentially a decentralized AI algorithm service market, connecting numerous AI models with different expertise and knowledge. When users raise a question, the market can intelligently select the most suitable AI model to provide the answer. Representative products include Bittensor, which aggregates various AI models through sub-networks to output high-quality content for users; and Pond, which selects the best decentralized models through competition scoring, and incentivizes each model contributor through the tokenization of AI models, thereby promoting the innovation and optimization of AI algorithms.
From this, we can see that the crypto market has already built a thriving crypto AI ecosystem around the three pillars of "data, computing power, and algorithms".
What are the positive factors for the crypto AI track in 2025?
However, since the AI Agent Meme market became popular in October, AI Agent-related products have become the new darling of the crypto AI market, such as the Talus Network project, which announced a $15 million financing on $6 million in November, specifically building a framework and infrastructure for AI Agents.
Furthermore, the AI Agent Meme craze has not only ignited a new speculative hotspot in the crypto AI track, but also gradually shifted the market's focus from the original decentralized data, GPU, and other crypto AI infrastructure areas to the enthusiastic pursuit of AI Agent applications, such as a16z's market value already exceeding $1 billion, and this trend is still continuing to heat up.
In the recent 2025 crypto industry trend outlooks 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, and specifically pointed out that AI Agent-related products will see explosive growth in 2025.
At the same time, the external heat in the AI field is also on the rise. On December 23, Elon Musk's AI company xAI announced another $6 billion in new financing, with its valuation directly soaring to $40 billion, further driving the prosperity of the AI market.
At the narrative level, OpenAI is experiencing a transformation from GPT to the general artificial intelligence agent AI Agent. It is reported that OpenAI plans to launch a new AI Agent product "Operator" in January 2025, which can automatically execute tasks such as writing code, travel booking, and e-commerce shopping, and is expected to ignite the AI market again like Sora did in early 2024. In addition, Nvidia's annual AI summit will also be held in March 2025, which is another focus of attention for the crypto and AI industries.
Each time AI giants like Nvidia and OpenAI upgrade their large models, it ignites the hotspot in the AI track, attracting new capital inflows, further exploding the crypto AI track.
At the policy level, US President-elect Trump has announced the appointment of former PayPal executive David O. Sacks as the White House's AI and cryptocurrency affairs officer, responsible for guiding the government in formulating policies in the fields of artificial intelligence and cryptocurrency. This person has dual investment experience in the crypto and AI industries, having previously invested in crypto companies like Multicoin and AI companies, and is naturally expected to drive policies that will promote the integration of crypto and AI.
