Encryption AI Track 2024 Review: Rapid Development from Infrastructure to AI Agent

In 2024, the encryption AI field achieved unprecedented growth. At the beginning of the year, there were only a few projects, but now it has become an independent track in the encryption market that cannot be ignored.

According to the latest data, on December 7, the total market value of the encryption AI sector surpassed $70 billion, reaching a peak share of 2% in the entire encryption market, with an annual growth rate of 400%. At the same time, the number of encryption AI projects has also exploded, currently exceeding 600, covering various categories such as decentralized AI infrastructure, AI Dapps, and more.

Looking back at 2024, the narrative of encryption AI has undergone several major changes. At the beginning of the year, OpenAI's Sora project ignited a frenzy of speculation around encryption AI infrastructure. Subsequently, NVIDIA's annual AI conference brought decentralized GPUs to the forefront of market attention. Mid-year, the encryption AI sector experienced an investment boom, with numerous projects receiving funding to accelerate technology research and application processes. By the end of the year, the explosion of AI Agent Meme pushed the narrative of encryption AI to a new climax.

Encryption AI total market value exceeds 70 billion USD, with more than 600 projects.

Recent data shows that the number of Tokens included in the encryption artificial intelligence sector has reached 355, with a total asset market value exceeding 70 billion USD on December 7, peaking at 70.42 billion USD. As of December 23, affected by the overall market correction, the total market value of the encryption AI sector has fallen back to 47 billion USD, with a 24-hour trading volume still reaching 5 billion USD.

At the beginning of the year, the total market value of the encryption AI sector was only 17 billion dollars. In less than a year, the total market value of this sector has increased by over 400%, demonstrating the vigorous development and immense potential of the encryption AI field.

Analysis indicates that although the current encryption AI sector accounts for only about 1% of the total market capitalization of the crypto market, with the evolution of market cycles and the strong momentum of AI infrastructure and AI Agents, the market capitalization of this sector is expected to achieve a tenfold increase.

It is worth noting that on December 23, the total market capitalization of the entire encryption market reached 3.4 trillion USD, with the market share of encryption AI assets accounting for nearly 1.4% (over 2% at peak market cap), further proving its potential for future market growth.

2024 is a critical year for the encryption AI field, transitioning from emerging prominence to full-scale explosion. At the beginning of the year, the encryption AI track was still in its infancy, with a limited number of projects. However, in less than a year, the encryption AI field can now be divided into multiple sub-tracks, covering various branches such as decentralized GPU, AI data platforms, AI infrastructure, and AI Agents, with the number of projects reaching into the hundreds.

Currently, the number of encryption projects that include AI terms has exceeded 600, and this number is still increasing.

2024 Encryption AI Catalyst: External Factors, VC Layouts, and AI Agent Meme Outbreak

From the data trend of the total market value of encryption AI assets, the growth in 2024 shows two significant peaks: the first peak occurs between February and March, and the second takes place after October, welcoming a stronger wave of growth.

The growth of the encryption AI sector from February to March was primarily driven by two landmark events in the AI field. OpenAI released the "Text to Video" large model Sora, which propelled the price of the Worldcoin token WLD to soar, driving strong growth in the entire encryption AI asset sector. Subsequently, the annual AI conference held by Nvidia attracted global attention again, pushing its market value to surge and triggering a wave of speculation in GPU chips.

Since then, encryption AI has officially developed into an independent track, with projects such as AI infrastructure, decentralized GPU, and decentralized AI data emerging one after another, bringing more choices and opportunities to the market.

In October, the growth of the encryption AI sector was mainly attributed to the explosion of AI Agent Meme. The emergence of the AI Agent project Truth Terminal's token GOAT triggered a wave of hype around AI Agent Meme projects, leading to the mass issuance of nearly a hundred AI Agent Meme coins. This trend has allowed AI Agents to rapidly rise, becoming an independent sub-sector within the encryption AI field, with products covering AI Agent Meme coins, AI Agent issuance platforms, and AI Agent underlying infrastructure. As of December 23, the total market capitalization of AI Agent track tokens has reached as high as $9.8 billion, accounting for about 20% of the total market capitalization of the entire encryption AI track projects, with hype continuing.

In 2024, the encryption AI market has ushered in an unprecedented investment boom, with major investment institutions rushing in and investment amounts soaring sharply. Top venture capital firms such as Grayscale, Delphi Venture, Coinbase Ventures, Binance Labs, and a16z have actively positioned themselves in "Crypto+AI" projects. According to reports, in the third quarter of 2024, encryption venture capital firms injected over $213 million into AI projects, a month-on-month increase of 250% and a year-on-year growth rate of as much as 340%.

The market potential of "Crypto for AI" is greater than that of "AI for Crypto"

Currently, the encryption AI products on the market can be mainly divided into two forms: "AI for Crypto" and "Crypto for AI."

"AI for Crypto" focuses on applying AI technology to encryption products, such as using AI for code optimization and security auditing, participating in on-chain yield strategies, and integrating AI chatbots.

"Crypto for AI" focuses on leveraging encryption technology to empower the AI industry, such as using blockchain technology to address privacy and security issues in data processing for AI models, allowing communities to own or use AI models through model assetization, and aggregating idle computing power resources.

Overall, "Crypto for AI" shows broader prospects and potential in terms of market application. This trend has prompted more and more insiders in the AI industry to actively seek to leverage encryption technology to tackle the challenges and problems faced by the AI sector.

Build an encryption AI ecosystem around the three elements of "data, computing power, and algorithms".

Based on the three core elements that drive the development of large AI models: "data, computing power, and algorithms," the specific product forms within the encryption AI product ecosystem include the following aspects:

At the data level, encryption AI data projects encompass the collection, storage, and processing of data. Some projects incentivize users to share data through token economic mechanisms, while decentralized data labeling platforms contribute high-quality training datasets for developers, and certain solutions ensure the security and durability of the data.

In terms of computing power, decentralized GPU computing networks have emerged, allowing anyone to contribute idle GPU computing capacity to perform AI tasks and earn rewards. Some projects even tokenize physical GPUs, transforming them into financial digital assets on the blockchain.

At the algorithm model level, a decentralized AI algorithm network is essentially a decentralized AI algorithm service marketplace that connects numerous AI models with different expertise and knowledge. Some projects aggregate various AI models through subnetworks or competition points to deliver high-quality content to users.

2025 Outlook for the Encryption AI Track

Since the AI Agent Meme market became popular in October, AI Agent-related products have become the new favorites in the encryption AI market. This wave of enthusiasm has not only ignited new speculation hotspots but also shifted the market's focus from the infrastructure sector to AI Agent applications.

Multiple institutions have expressed optimism about the development of the encryption and AI markets in their 2025 outlook for the encryption industry trends, particularly noting that AI Agent-related products will experience explosive growth in 2025.

The heat in the external AI field continues to rise. A well-known entrepreneur's AI company has announced the completion of a large financing, further promoting the prosperity of the AI market.

On the narrative level, a large AI company is undergoing a transformation from GPT to a general artificial intelligence agent, planning to launch a brand new AI Agent product in January 2025. Additionally, a well-known chip company will hold its annual AI summit in March 2025, which is also a focus of attention in the encryption and AI industries.

At the policy level, the new president of the United States has announced the appointment of individuals with dual investment experience in the encryption and AI industries as the head of artificial intelligence and cryptocurrency affairs at the White House, which is believed to drive policies that will promote the integration of encryption and AI.