According to David Cheung, the Crypto x AI sector represents only 1% of the entire cryptocurrency market capitalization. However, he believes the sector has room to grow.
David Cheung reached out to X to publish an analysis in which he found that cryptocurrency and artificial intelligence have great potential for growth. An analysis by Syncracy Capital, which Chung co-founded, found that only 1% of the $3.83 trillion crypto market is Crypto x AI. He also believes that Crypto x AI is in its infancy compared to DeFi, which reached 6% of total market capitalization in 2020.
He also emphasized that early positioning will provide a great opportunity for exponential growth, and Crypto x AI is well positioned to gain shareholding in the coming years. Chung isn’t the only one expecting a boom in the cryptocurrency and artificial intelligence markets.
Despite the recent growth, Crypto x AI still represents about 1% of the total cryptocurrency market capitalization.
The sector could easily grow 10x as we move through a cycle where leading AI frameworks, AI agent platforms, and AI agents outperform disproportionately.
It’s still early. pic.twitter.com/hu82LZkzyM
— Daniel Chung (@HighCoinviction) December 12, 2024
Industry leaders such as investor Andrew Kang have noted that AI plays an important role in cryptocurrency trading. “In the near future, any decent discretionary traders will no longer be pushing buttons to trade on their own,” Kang wrote on X. Instead, heuristics and mental models are fed into artificial intelligence systems that enable efficient decision-making on autopilot. This is part of a larger trend in AI-powered trading models that replace manual labor with computerized workflows.
In the near future, any decent discretionary trader will no longer be pushing buttons to trade on their own. It would be like solving large math problems by hand instead of using a calculator. Primitive, a waste of time, a thing of the past.
Instead, traders (and investors) will…
— Andrew Kang (@Rewkang) December 12, 2024
“There is a strong and natural connection between these two technologies due to their connection to data. However, there is also a sense of urgency to bring them together as we look to address the shortcomings of both technologies as they begin to get into the hands of billions of users.” said Jasper De Maire of Outlier Ventures.
Current Issues in the Crypto x AI Sector
Implementing Crypto x AI comes with some challenges, including data privacy and security, and the difficulty of protecting sensitive information. Misinformation and overwhelming data complicate the reliability of AI, and algorithmic bias and centralization hinder decentralization efforts. Moreover, AI-driven bots undermine trust and authenticity in blockchain ecosystems and further complicate the user experience.
Future prospects:
There has been increasing open interest in AI-focused cryptocurrencies NEAR Protocol (NEAR), Fetch.ai (FET) and Bittensor (TAO), leading to increased investor interest in Crypto x AI projects. Trading of AI-enabled tokens has increased in 2024, leaving room for further adoption.
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