The emergence of ChatGPT marked a significant shift towards artificial intelligence (AI) in the latter part of 2022, with respect to the cryptoverse . Various industries, including educational institutions and pharmaceutical companies, swiftly adopted AI, leading to widespread deployment across different sectors. Prominent stocks such as Nvidia experienced substantial gains as the demand for AI processing chips and related services surged, bolstering their overall position.
The intriguing convergence of crypto and AI presents another promising realm for potential growth. A recent research report from Coinbase highlighted the significance of the intersection between AI and crypto, stating that it offers valuable opportunities for entrepreneurs aiming to build within the Web3 framework.
Crypto AI Sector: Surging Market Cap and Momentum
Clearly, there has been a noticeable shift in the excitement surrounding AI in recent months. The market capitalization of the Crypto AI sector has experienced a rapid increase since the fourth quarter of 2022. In fact, the number of AI digital assets has recently surged by over 80%.
So, are we making progress in the right direction? It appears so. As demonstrated below, the overall market capitalization of the Crypto AI sector has grown by millions of dollars in the past few months. While there has been a significant pullback, it is worth noting that the current levels remain considerably higher than those observed before the AI boom.
However, it is important to bear in mind that both crypto and AI are still in the early stages of development. Currently, the market capitalization of crypto projects specifically focused on developing AI models on the blockchain, utilizing AI in decentralized applications, or addressing AI-related challenges remains relatively low.
The combined value of AI tokens amounts to only $772 million, representing a mere 0.07% of the total crypto market capitalization, which is negligible. In contrast, other categories such as Bitcoin, smart contract tokens, stablecoins, currencies, DeFi tokens, and scaling solution tokens hold significantly higher proportions.
Despite the current relatively small figure, Coinbase anticipates growth in the sector. However, it is important to recognize that this growth will not occur overnight, as sustained hype alone is insufficient. When considering projects that have integrated or are in the process of integrating AI in various forms, the $772 million figure for AI’s market capitalization rises to approximately $2.85 billion.
Certain AI-related crypto projects, for example, aim to leverage decentralized solutions to tackle challenges related to data accessibility and computational resources. The report ultimately reached this conclusion.
“We’re still in the early stages of seeing how AI and blockchain technology could interact. Although we would expect this sector of the digital asset market to grow, this is more likely to happen only over the longer term.”