I always take myself as a crypto investor. However, in recent 2 years I found myself investing more in AI than crypto. I have been thinking what’s the reason and why it happened inadvertently. For sure the appearance of large language model attracted attentions from everyone and also the recent narratives on AI agents leading to multiple 100x altcoins. However, DeepSeek appears as a black swan which broke the recent AI bubble both in the stock market and crypto market. Meanwhile, Bitcoin has surged from around $18000 to around $100000. All in all, I think I invested more in AI than crypto because there is not too much outstanding crypto project in this cycle in my opinion. Even lots of useless projects, mostly memecoins appeared and this made crypto a gambling game.
Generally speaking, when a specific sector/narrative in the industry continuously generates attention and creates positive feedback through retail wealth effects, it forms a convergence - meaning everyone’s thinking converges. Examples include the 2017 ICO wave, 2021 DeFi Summer, and 2024 meme coins/memetics.
However, unfortunately the current situation is:
BTC ecosystem likely won’t have this possibility, as it’s all just recycled infrastructure and staking from the previous cycle
The EVM ecosystem has some promising projects this cycle, but unfortunately it’s still struggling, and the Ethereum Foundation shows no support
Solana shows some signs of coordinated movement, but unfortunately it’s being heavily drained by pump.fun - the same factor that made it successful could lead to its downfall (a double-edged sword)
Notifying these facts, I feel hesitant to invest in crypto projects (even though I believe I already invest some and have already exited). In comparison, the quality of some AI projects is much better than those crypto ones because they are making real contributions and set a long-term target. I’m not saying crypto projects have low quality but in this bull cycle this is true. Some observations:
People don’t buy VC tokens and project party list for selling. This usually happens before a serious bear market.
Memecoins attracted lots of attention and listing becomes easy via Pump.fun. However, more than 90 percent of people lost money during PvP.
The volatile policies made it hard to predict the market and layoffs continued.