Key Figures and Discoveries
- The crypto AI sector surged by over 395% since November 2023, but it still accounts for just 1.5% of the total crypto market cap.
- AI infrastructure projects historically dominated the sector, but their share drastically declined in a year as AI memes and AI agents gained significant traction, showing over 1,100% and 180% market cap increases, respectively.
- The average daily trading volume for AI tokens increased by 93% year-over-year, though it has dropped 44% from its December 2024 peak.
- AI agent tokens outperformed AI infrastructure tokens by trading volume, and, despite the recent sharp decline, they continue to dominate trading volume within the sector.
- AI tokens underperformed relative to their size, lagging behind much larger AI-related stocks, especially over the past year.
- AI tokens maintain a positive correlation with Big Tech stocks, with Meta (0.91) and Nvidia (0.84) showing the highest, but earnings releases like Nvidia’s showed an inverse correlation.
Introduction
“The reason it is so hard for so many humans to understand crypto assets is because these assets are not for us. They are being built for the machines.” This six-year-old quote resonates deeply with today’s crypto landscape.
On one side, the crypto industry has embraced automation, with the rise of on-chain smart contract utilities and bots playing a growing role in network efficiency. However, digital assets have struggled to establish a widespread presence within the broader AI revolution. While AI advancements from Big Tech giants have fueled investor enthusiasm, the crypto AI sector remains structurally underdeveloped and highly speculative.&
In this report, we’ll explore the changing landscape of the crypto AI sector and its relationship with mainstream AI innovation.
Methodology
The analysis in this report is based on data sourced from CoinMarketCap, CoinGecko, TradingView, and Dune. The market cap and volume trends of AI-related digital assets were compared against broader crypto market movements to assess sector-specific shifts. Due to the non-established categorization of AI tokens, the report offers its own sector distribution divided between AI infrastructure, AI agents, and AI-themed memecoins. Additionally, price correlations with leading AI-focused stocks were examined to determine the influence of external AI advancements.
Market Cap Trends
Total Market Cap
The total market cap of the crypto AI sector has seen a massive surge starting November 2023, jumping by over 395% and driven by growing AI optimism. The sector has largely mirrored the broader crypto market, experiencing two significant rallies in Q1 and Q4 2024:
- The first rally primarily benefited the AI infrastructure segment and market early expansion of AI-themed memecoins.
- The second rally saw a shift in market dynamics, with AI memes gaining even more traction, while AI agents surged alongside rapid adoption of the Virtuals.io platform.
Despite these surges, the sector’s market cap currently remains 56% below its December 2024 peak due to the DeepSeek R1 release and a broader market cooldown.
Throughout the past year, AI-related assets have maintained a relatively small footprint within the crypto market, accounting for around 1.5% of the total crypto market cap. This suggests that while the sector has grown significantly, its gains have mostly been in line with the wider market. However, its share within the altcoin market has slightly improved, rising from 3.14% in January 2024 to 3.58% in January 2025.
Note: The “Total” value represents the overall crypto market cap, “Total 2” — excludes Bitcoin, while “Total 3” — excludes Bitcoin and Ethereum.
Market Cap Distribution by Category
The classification of AI crypto projects remains an evolving process, with debates over naming conventions and categorization criteria. For instance, many AI-related categories on CoinGecko were only established a few months ago, and many projects overlap across multiple categories. In this case, let’s focus on three major categories that have existed for at least a year:
- AI Infrastructure – Projects like Near, Render, and Bittensor, which provide the computing and blockchain layers necessary for AI to function on-chain.
- AI Agents – AI-driven models that can interact online in real-time, along with platforms enabling their creation and deployment.
- AI Memes – Speculative AI-themed tokens, often driven by hype rather than underlying technology.
Historically, AI infrastructure has dominated the sector, accounting for over 86% of the crypto AI market cap in February 2024. However, 2024 marked a shift toward speculative AI narratives, with AI agents doubling their market share and AI memes skyrocketing their share by over 15x.
This shift stems from AI infrastructure’s stagnant performance, and suggests that either the market doubts the long-term value of infrastructure projects, or these projects require more time for widespread utility. Meanwhile, the demand for fresh, high-momentum narratives has propelled AI agents and memes to the forefront.
Notably, a surge in AI agents and memes is closely linked. The AI agent category saw a major boost in Q4 2024, driven by the launch of the first online AI influencer on the Virtuals Protocol platform (e.g., Luna). In turn, AI memes gained momentum, largely fueled by the Terminal of Truth AI agent/chatbot, which became widely known for shilling Goetius Maximus (GOAT) memecoin on social media.
Note: Performance as of February 25, 2025
Market Cap Changes by Asset
On an individual token level, established infrastructure projects continue to hold the largest market caps, with eight still above $1 billion despite the sector’s recent pullback. In contrast, only one AI agent token (FET) currently exceeds $1 billion, and no AI meme tokens surpass $500 million.
That said, market leadership within AI infrastructure is shifting. ICP and The Graph (GRT) have lost ground in the sector’s market cap rankings. Bittensor (TAO) and Render (RENDER) have gained share, reinforcing their position as key infrastructure players.
Although infrastructure projects have a significant margin of safety, AI agents are getting closer to the top positions in market cap. Since December 2024, AI agent launchpad platforms such as Virtuals Protocol (VIRTUAL), Griffain (GRIFFAIN), and AI Rig Complex (ARC) have notably increased their market presence.
Note: The breakdown includes a combination of AI infrastructure (NEAR, ICP, TAO, RENDER, GRT) and AI agent tokens (FET, VIRTUAL, AI16Z, ARC, GRIFFAIN).&
Virtuals Protocol has been the main driver of the sector’s move toward AI agents, with tokens launched on this platform surging from nearly zero to over $3.5 billion in market cap within three months. However, the hype quickly faded, leading to an 87% decline from its peak, suggesting that this may be more of a speculative play than a lasting technological advancement.
This market cap decrease was accompanied by a substantial drop in daily AI agent launches on Virtuals, from over 1,000 in November to less than 10 in February. At the time of this writing, only 2.2% of these AI tokens have graduated, or accumulated 42,000 VIRTUAL tokens to get their own liquidity pool.&
AIXBT dominates among Virtual-launched AI agents, accounting for over 45% of the combined market cap.
Volume Dynamics
Total Volume
The average daily volume of AI tokens saw a significant improvement, increasing by more than 93% since January 2024. However, this growth was undermined by a 41% decline in daily trading volume from the sector’s peak in December.
In December 2024, AI tokens reached an all-time high, with the top 10 assets in the sector registering over $100 billion in monthly trading volume. For comparison, this is equivalent to the entire memecoin trading volume on Solana DEXes that month.
While the sector’s overall market cap followed broader trends, trading activity among AI tokens intensified relative to its size. Over the past year, the AI sector’s share of total trading volume increased from 1.5% to 2.22%, with a significant portion of this increase occurring in the last three months.
Note: The “Total” value represents overall crypto trading volume, “Total 2” — excludes Bitcoin, while “Total 3” — excludes Bitcoin and Ethereum.
Volume-to-Market Cap Ratio
The uptick in trading activity suggests growing interest in AI tokens, but the Volume-to-Market Cap Ratio suggests that AI tokens are not attracting the same level of short-term hype-driven volume as general altcoins and memecoins. The fact that AI tokens aren’t experiencing the same trading frenzy could mean that the sector lacks the viral appeal needed to sustain momentum, making it harder for projects to capture retail attention and drive network effects.
Additionally, if AI tokens remain stuck in a middle ground — not as fundamentally strong as BTC/ETH but not as hyped as memecoins — they risk lagging in speculative market cycles, limiting their potential for explosive short-term gains.
Volume Distribution
Trading volume breakdown between assets also reveals an even more remarkable shift in favor of AI agents. In January 2025, top 5 AI agent tokens outperformed top 5 AI infrastructure ones by monthly trading volume. VIRTUAL played a pivotal role in this trend, briefly securing a 20% share of a combined volume.
Note: The breakdown includes a combination of AI infrastructure (NEAR, ICP, TAO, RENDER, GRT) and AI agent tokens (FET, VIRTUAL, AI16Z, ARC, GRIFFAIN).&
The same month, the VIRTUAL token and AI agents launched on Virtual Protocol briefly made up 28% of the total DEX volume on Base, Ethereum’s Layer 2 network. However, as the initial hype faded, their share shrank to just 8%, with total DEX volume for VIRTUAL dropping by 64% and Virtual-based AI agents plunging by 93%. Despite the sharp decline, AI agents continue to dominate trading volume within the sector.
Big Tech AI vs. Crypto AI
General Observations
While AI tokens are heavily influenced by broader crypto market trends and sector-specific developments, they also have a unique catalyst: breakthroughs in AI technology from top-tier IT corporations. Big Tech serves as a major reference point for crypto AI projects, shaping the overall AI narrative and indirectly driving interest in blockchain-based AI solutions.
Here are some key observations on how this dynamic plays out:
- Mainstream AI breakthroughs don’t cause immediate crypto AI growth — While OpenAI’s ChatGPT launch and GPT-4o announcement boosted sentiment in AI tokens, their immediate impact on crypto AI was largely in line with the broader market. For example, after ChatGPT’s launch, the total crypto market cap saw a 12% increase over the next 7 days, while the crypto AI market cap increased by 10%. However, as ChatGPT saw massive adoption in the months following its launch, it provided a sustained boost to the sector.
- The more attention AI narratives receive, the greater the volatility in crypto AI — Sam Altman’s temporary ouster from OpenAI and the release of DeepSeek both put AI in the spotlight, but with different immediate effects. Altman’s temporary ouster coincided with a 49% surge in crypto AI market cap. In contrast, DeepSeek’s release caused only a slight dip of 2%, but it led to notable volatility in the following weeks as the industry took time to assess its impact.
- Big tech intersections with crypto AI typically cause notable market moves — For example, Elon Musk has long been an impactful figure in the crypto space, and when rumors of his AI initiative emerged in November 2023, followed by the official announcement, crypto AI saw a significant surge. The announcement of xAI and the Grok AI chatbot led to a 35% rise in the crypto AI market cap in a week.
Table: 7-Day Performance of Total Crypto Market Cap & AI Tokens After Key AI Events
AI Stock and Cryptocurrency Performance
Although AI crypto tokens are much smaller in market capitalization and more focused on AI-specific applications than some AI-related stocks, the sector hasn’t fully captured AI market momentum.
Top AI stocks like Nvidia (670%) and Palantir (1,109%) delivered massive gains since ChatGPT’s launch in November 2022. In contrast, the average performance among top AI crypto tokens (403%) over the same period was significantly lower. While some AI tokens, such as FET (954%) and RENDER (634%), saw impressive gains, the sector as a whole underperformed relative to its size.
Note: Performance as of February 25, 2025
When analyzing a shorter investment period, crypto AI tokens appear even more underwhelming. Over the past year, top AI tokens primarily remained in the red, significantly lagging behind Big Tech stocks. Additionally, while some AI stocks fully recovered from a DeepSeek-related sell-off, AI tokens remained largely underwater, failing to capture positive momentum.
Nevertheless, AI tokens continue to exhibit a high correlation with Big Tech stocks. As such, while Big Tech does not act as the primary driver of AI token performance, it serves as an amplifying catalyst. Among the observed stocks, Meta (0.91) and Nvidia (0.84) showed the highest correlation with AI tokens.
Table: Big Tech Stocks vs. AI Tokens Performance Since Key AI Events. Performance as of February 25, 2025
Nvidia Earnings Effect
Earnings season is one of the most anticipated regular events for stock investors, as financial reports often drive increased volatility. Given the high correlation between Big Tech and AI tokens, one might expect similar price action in AI tokens during these events, especially considering reports that Nvidia’s earnings previously boosted crypto AI performance.
However, when comparing Nvidia’s one-day and seven-day post-earnings performances with those of top AI crypto tokens, the correlation actually turned negative (-0.21 for 1D and -0.07 for 7D). While this effect smoothed out over a longer period, the event suggests that Big Tech developments may shift attention out of crypto AI.
Conclusion
Crypto AI remains a niche but evolving sector within the digital asset market. While its market cap has expanded significantly, its long-term growth remains uncertain, as trading volume is heavily driven by short-term speculation, with frequent but fleeting volume spikes rather than steady, organic growth. The rapid rise and fall of volume indicate that capital is not staying within the sector for extended periods, making it vulnerable to liquidity drains and price instability.&
Despite its high correlation with AI stocks, crypto AI’s price movements often diverge from traditional AI market trends, suggesting that its momentum is fueled more by internal hype cycles than by fundamental AI advancements. The shift from infrastructure projects to AI agents and memes highlights changing market priorities, with speculative narratives gaining traction over foundational development.
Looking forward, the sector faces both opportunities and risks. If AI-driven blockchain solutions achieve real-world utility, they could secure a stronger foothold. However, without sustained investor confidence and clear technological advantages, crypto AI risks being overshadowed by both traditional AI innovation and more established crypto narratives.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments