The Crypto x AI sector represents only 1% of the total crypto market capitalization, says David Cheung. However, he believes there is room for growth in the sector.
David Cheung took to X to publish an analysis in which he found that crypto and AI have major growth potential. The analysis, carried out by Syncracy Capital, co-founded by Cheung, shows that only 1% of the $3.83 trillion crypto market includes Crypto x AI. He also believes that Crypto x AI is in its infancy compared to DeFi, which peaked at 6% of the total market cap in 2020.
He also highlighted that early positioning would provide a great opportunity for exponential growth and that Crypto x AI is well-positioned to become more prominent in terms of shares in the coming years. Cheung is not the only one expecting a boom in the crypto and AI market.
Industry leaders, like investor Andrew Kang, have mentioned that AI has an important role to play in cryptocurrency trading. “In the near future, any decent discretionary trader will no longer click buttons to trade themselves,” Kang wrote on X. Instead, heuristics and mental models are built into AI systems, which opens up the possibility of effective decision-making on autopilot. This is part of a broader trend in AI-driven business models, in which manual labor is being replaced by computerized workflows.
“There is a strong and natural fit between the two technologies because of their relationship with data. However, there is also an urgent need to combine them as we seek to address the shortcomings of both technologies as they begin to fall into the hands of billions of users. said Jaspere De Maere of Outlier Ventures.
Current issues in the Crypto x AI sector
Adopting Crypto x AI comes with some challenges, including data privacy and security and the difficulty of protecting sensitive information. Misinformation and data abundance make AI reliable, while algorithmic bias and centralization hinder decentralization efforts. Additionally, AI-based bots erode trust and authenticity within blockchain ecosystems and further complicate user interactions.
Future prospects:
Growing open interest is visible in AI-driven cryptocurrencies NEAR Protocol (NEAR), Fetch.ai (FET), and Bittensor (TAO), resulting in increased investor interest in Crypto x AI projects. AI-powered tokens saw a recovery in trading over the course of 2024, giving way to greater adoption.
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