- The AI crypto space has recorded steady growth in volume, signaling rising demand from traders.
- The notable growth of AI in real-world use cases has helped bolster the bullish outlook for related crypto tokens.
- Near Protocol (NEAR), Story (IP), Filecoin (FIL), and Bittensor (TAO) are expected to be among the front-runners.
The AI crypto sector has overtaken other categories in recent weeks, according to data compiled by CoinGecko. Weighted average performance for AI tokens reached 19.2%, compared with 15.5% for privacy coins and 13.8% for exchange tokens.
That shift marks a reversal from August, when exchange-based tokens led the market. Now, decentralized AI projects are drawing stronger inflows and renewed trader attention.
Bittensor Subnets and AI Applications Drive Gains
According to market data from CoinGecko, Bittensor Subnets, with a market cap of around $789 million, recorded the highest gains of 3.4% in the AI space. The AI crypto sector has gained a bullish outlook since early April this year, thus likely to recover the losses incurred during the first half of 2025.
During the last three months, the market cap in the AI applications sub-sector has led with the highest gains of 42% to hover about $1.65 billion. The Bittensor Subnets have followed with a 25.4% increase, and the AI framework with around a 5.5% gain to about $1.4 billion.
Capital Rotation and Real-World AI Adoption
The AI crypto space has gained a bullish outlook in the recent past fueled by notable investments from institutional investors. For instance, the Grayscale Decentralized AI fund has a total assets under management of $1.1 million.
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Earlier this year, Celestia AI raised $250 million led by Fidelity to build AI infrastructure. Meanwhile, capital rotation in the altcoin market from large-cap projects, as the Ethereum (ETH) price stalls near its all-time high, has favored the AI sector.
Emerging Real-world Use Cases
The renewed demand for AI-related crypto tokens is largely backed by the growing need for artificial intelligence in the real world. The decentralized AI sector has gained more traction in the recent past, especially after the United States under President Trump made a major investment in Intel Corp.
Best-Positioned Tokens for Upside
The best altcoin picks in the AI sector for potential upsurge include projects with robust fundamentals and rising trading volume.
- Near Protocol (NEAR), which has a market cap of about $3.38 billion and a 24-hour trading volume of about $184 million, has more upside potential.
- Bittensor (TAO) has a strong upside potential backed by its strong ecosystem development and rising demand from traders. During the last 24 hours, TAO recorded a 24-hour traded volume of around $97.5 million.
- Filecoin (FIL) is another AI-based token with robust fundamentals amid renewed demand from traders. During the past 24 hours, FIL recorded a traded volume of about $296 million.
- Story (IP) was the top-performing AI-based altcoin after a 7.9% surge to trade around $10.11 on Wednesday. The altcoin recorded a market cap of $3.1 billion and a 24-hour average traded volume of about $110 million.
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