🟣 Crypto's Hidden Utility

Vitalik published a blog post about how AI and crypto can collide. For the 100th time, we are telling you to not overlook AI x crypto.

January 30, 2024

Majors continue to look strong across the board, with notable outperformers like Sui and Solana leading the way. If you attended our analyst hours call a few weeks ago, Boccacio and I pitched the bull case for Sui, and the timing could not have been better. This is your friendly reminder that the FOMC is meeting today to tell us what they think our money should be worth.

In other news, Vitalik published a post about how AI and crypto can intersect, and every AI coin on the market rapidly appreciated. Man oh man, it pays to have Xwitter notifications on for the founder of Ethereum. Our analyst Brick actually beat Vitalik to the punch on publishing an AI thesis last week.

There is a lot to unpack in Vitalik’s post, but the key takeaway is that the current state of AI is centralized, monopolistic, and lacks transparency. Crypto on the other hand, is sufficiently decentralized, open source, and transparent. Is it making sense yet? If there’s one thing that crypto can do well in its current state today, it’s incentivizing behavior, whether that means rewarding compute providers with tokens or incentivizing unbiased AI output verification onchain.

At this stage, crypto investors need to think long and hard about how they are positioning for a future where AI coexists with crypto. DeFi was a fun little test, but I tend to believe that the real utility for crypto lies in creating and incentivizing trustless systems, not taking out an overcollateralized loan.

— 0xPibblez

P.S. Blockworks Research would like your feedback to help prepare Blockworks’ 2024-2025 Research, Data, and Analytics Roadmap. 

This survey should take a few minutes and is incredibly helpful for us.
Thank you!

In the past seven days, Bittensor, Render, Akash, and Autonolas rose 76%, 28%, 24%, and 38%, respectively. Vitalik posits that “AI as a player in a game” is one of the most likely categories where AI and crypto can collide. Crypto trading card game PRIME, which has its own AI component involved, saw a quick 27% increase in price.

We are still in the early innings of the AI x crypto trade, and it is likely that stronger competitors emerge throughout the next few years. The sidelined investor says, “Oh no this is already up so much! I can’t buy here!” The iron-willed investor says, “A successful AI token in crypto has the potential to effectively double the current market cap of all crypto tokens today.”

2023 was an incredible year for Synthetix, as it was able to come out of the grueling bear market and create and scale a brand new offering to find product market fit in a short amount of time.

A handful of AI projects already exist that are quite highly valued, but there is definitely more potential left, especially if the market continues to turn increasingly bullish overall.

Invesco Galaxy lowered BTCO’s fee from 0.39% to 0.25%.

The European Securities and Markets Authority wants to protect EU crypto firms and customers with the proposed guidelines.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.