AI tokens and decentralized AI projects surge in value as the crypto market enters a historically strong Q4 amid anticipation of major AI advancements.
TL;DR…
- Bittensor (TAO) Surged 74.9% in the past week: It now sits as the 27th largest cryptocurrency.
- AI tokens booming: The AI sector crushed the broader market, posting 31.4% average gains. Commune AI saw a massive 167% increase, with Zero1 Labs and Delysium also performing well.
- DeAI News: Bittensor is gearing up to launch EVM smart contracts, enhancing AI network functionality, while Chromia announced a $20M fund to back AI and data projects.
- Q4 hype: Bitcoin’s up 8% for the month, with Q4 historically being a strong period. AI advancements like GPT-5, Claude 3, and Llama 3 are expected to drive further market interest.
AI tokens are returning to glory this week after posting impressive returns across the board.
Many AI tokens are now climbing the rankings as the sector has delivered on expectations and outpaced the competition.
In today’s weekly update, we look into the whats and whys of this recent price action and a take look ahead to the future.
Click here to check out last week’s AI roundup.
Decentralized AI Puts on a Display
From a price action perspective, the last week has been one of the most interesting in recent times — with many projects clawing back much of their Q3 losses.
AI projects have been putting on a particularly impressive display, with both large and small-cap projects across the board demonstrating strong gains.
This week, much of the spotlight has been on Bittensor — a decentralized network for AI model training and inference and arguably the market leader in decentralized AI (deAI).
Over the last 7 days, Bittensor (TAO) gained a whopping 74.9%, eclipsing the returns of most other projects and sending it soaring up the market cap league table. The TAO token is now the 27th largest cryptocurrency — gaining 9 places since this snapshot.
Source: Bittensor Coin Page
Widely projected to reach the top 10 by market cap, Bittensor would need to pull off a further 220% growth from here to achieve the 10th position based on the current rankings.
Practically all other AI tokens have also demonstrated meteoric growth this week, with some of the standouts being:
- Commune AI (a Bittensor fork) gained 167.4%
- Zero1 Labs (just partnered with Ocean Protocol) gained 144.2%
- Delysium (AI agent network) gained 73.6%
Overall, the average AI token is up 31.4% in the last 7 days compared to just 8.5% for the broader crypto market. This makes it the 3rd most profitable sector by mcap-weighted performance — behind meme coins and NFT marketplaces.
Check our most recent meme coin weekly update here.
Weekly News Roundup
A wave of fresh AI updates, developments and news were announced over the last week.
We’ve rounded up the most significant to give you a quick overview of what’s going on in the space right now:
- Kamala Harris pledges to support AI growth: The currently leading Presidential candidate Kamala Harris recently pledged to support the growth of both AI and crypto, stating “We will encourage innovative technologies like AI and digital assets while protecting our consumers and investors,” at a recent rally.
- Bittensor gearing up for smart contract launch: The Opentensor foundation recently announced that EVM smart contracts will soon be available on the Bittensor blockchain, enabling enhanced functionality for subnets, trustless token bridges and more.
- Ocean Protocol partners with Zero1 Labs: Zero1 Labs will support Ocean Protocol by developing decentralized AI systems, integrating cutting-edge AI tools, and providing projects with access to Ocean's global data marketplace and data monetization features.
- Bitcoin mining gets the AI treatment: Quantum Blockchain Technologies is leveraging the power of AI to optimize SHA-256 calculations. This approach decreases energy consumption and increases profitability. The company is also exploring quantum computing to potentially further enhance mining efficiency.
- ByBit adds AI risk engine: Global cryptocurrency exchange ByBit has implemented an AI-powered risk engine to further strengthen its security. The exchange will use AI to detect and prevent complex fraud attempts.
- Chromia reveals $20 million Ecosystem Fund: At the TOKEN2049 conference, Chromia announced a long-awaited mainnet upgrade as well as a $20 million Data and AI ecosystem fund. The fund is designed to support projects building on Chromia and boost the development of novel decentralized AI technologies.
What to Expect in Q4
Next week, we’ll officially enter Q4 — historically the best-performing quarter. Many who subscribe to seasonality theory believe this Q4 will be no different and are preparing their portfolios accordingly.
Historically, every time Bitcoin closed its September monthly candle in the green, at least 3 further months of green were observed. Given that Bitcoin generally leads the market, this usually holds for altcoins.
Image source: Coinglass
As it stands, Bitcoin is up 8% for the month, and with just 5 days left, it's looking promising.
Given that OpenAI may launch GPT-5 in Q4 2024, Anthropic could release Claude 3 and Meta might launch Llama 3, there is good reason to believe there will be continued interest in AI going forward.
If any of these models deliver unexpected functionality or dramatically enhance the utility of AI, this could bode well for the deAI sector — especially if crypto AI projects can deliver similar utility without centralization or privacy concerns.
If Nvidia’s Q4 earnings report continues its show of strength, this will also help enhance confidence in AI-related crypto projects that rely on decentralized computing power.One thing is for certain, exciting times are ahead.
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