This is the AI and Crypto Cycle

While every bull market is characterized by the craze it generates, it appears that the 2024 cycle will be remembered as the AI x Crypto cycle.

Two dynamic industries, each brimming with immense potential, are set to converge, creating a bubble of unprecedented scale. The influx of dollars into the BTC ETF acts as jet fuel for the rocket ship that will soon channel capital toward the high-risk segment of the crypto markets. In May or November, the approval of the ETH ETF is anticipated, which will further boost the blue-chip side of the crypto market. This will equip investors with the capital to seek out low-cap coins with the potential for massive returns, continuing the tradition of every bull market.

Meanwhile, Nvidia, with its $2.2 trillion market cap, has almost single-handedly dominated this growth narrative in the traditional stock market. Tech behemoths like Google and Microsoft are spearheading Web2’s efforts to harness the AI zeitgeist and reshape the future of technology markets. Additionally, Silicon Valley continues to channel the lion’s share of startup funding towards AI ventures.

However, there’s a significant issue: AI without crypto results in massive centralization, with Web2 companies and their leaders controlling the wealth and power AI generates. This concern has been highlighted by AI thinkers and philosophers long before AI became a mainstream topic. Now, the centralizing effects of AI on wealth and power are becoming evident. While AI and crypto might seem like opposites, they are not adversaries. They complement each other, and together, they can create a synergy greater than the sum of their parts. AI requires crypto to avoid a centralized, dystopian future dominated by oligarchs, and crypto needs AI for its immense utility and potential.

Decentralized Artificial Intelligence (AI)

In 2024, the term “Decentralized AI” will likely become ubiquitous. This concise and powerful phrase, “AI, but for the people,” encapsulates a wealth of information and significance.

Currently, centralized Web2 AI is dominated by monopolies that control vast amounts of data and computing power. These companies will invest heavily in developing their AI models to create the most powerful and versatile systems possible. In doing so, they will stifle competition and limit innovation. They will seek regulatory capture to solidify their dominance, making a few individuals incredibly wealthy and powerful, ultimately becoming our new overlords.

Decentralized Computing

The foundation for the AI x Crypto narrative starts at the decentralized compute layer, the base layer of the AI x Crypto tech stack.
Decentralized computing has been a part of the crypto sector for quite some time; there’s nothing new. What is new, however, is the significant price action these platforms have experienced since the onset of the AI investing cycle. As Nvidia’s market cap soars by billions and OpenAI introduces groundbreaking AI products, the demand for decentralized computing platforms is steadily increasing.

Filecoin: Up 100% in 30 Days
Arweave: Up 200% in 30 days
Render: Up 300% in 3 months
Bittensor: Up 1250% in 5 months
These are just four examples among many. There are hundreds of other platforms, with varying levels of quality, that have seen significant gains in recent months.

Some platforms are driven by solid fundamentals and growth fueled by the AI sector’s rise. However, for the most part, their price action is speculative, based on either anticipated future adoption by the AI sector or the expectation of future investors willing to pay more.

Artificial Intelligence (AI) Memecoins

Worldcoin is a genuine project with a legitimate founder, a real team, and a clear vision. However, it currently has an astonishing valuation of $63 billion, primarily driven by investors seeking exposure to AI through WLD.
This highlights what crypto brings to the AI industry: tokens and liquidity.

AI Memecoins and Narrative Investing Lessons on Bankless

Guidelines for this bull market are essential.
The industry consists of swift, radical innovators who are pushing the boundaries of technology.

The current pace of regulation and public market bureaucracy is inadequate and restrictive. As part of the Crypto x AI movement, we won’t wait for the old guard to catch up. Instead, we will forge ahead and create a better future.

Before AI builders master crypto and crypto builders master AI, we’ll first experience a surge of AI memecoins that will overshadow both fields.

The intersection of AI and crypto is genuine, but it will initially be dominated by vaporware and low-quality coins.
This sequence of events is to be expected.
It’s much easier to launch and promote an AI memecoin than to develop a legitimate project. Building authentic crypto and AI projects will take several years, while a crypto bull market typically lasts only 12–18 months.

The bullish sentiment around AI tokens stems from the fact that buying them requires minimal effort. New retail investors will find an AI-related ticker, watch a single YouTube video about it, and then eagerly hit the buy button.

What More Can We Anticipate

Bankless Nation, brace yourselves for the next 18 months.
The AI-crypto synergy is genuine, with solid fundamentals underpinning it. However, this signal will be overwhelmed by a surge of speculative frenzy in the crypto space.
Crypto projects will rebrand themselves as Crypto x AI ventures, causing their tokens to skyrocket.
Then, inevitably, the bubble will burst.
After the crash, we will rebuild everything on a stronger foundation than before.