This round of the bull market has not seen strong performance in the AI sector tokens, mainly for several reasons:
Narrative excitement has been exhausted
Last year, the AI concept had already peaked in the U.S. stock market (especially with Nvidia and Microsoft); the AI tokens in the crypto space also surged during that time. Now, there is a lack of novelty, and funds are more willing to look for "new stories."
Funds are more concentrated in mainstream hotspots
Currently, mainstream funds in the crypto space are flowing more towards Bitcoin ETFs, the Ethereum ecosystem, the Solana ecosystem, meme coins, and other sectors, while the AI sector is considered a fringe topic, leading to limited fund allocation.
Insufficient real-world applications
Many AI projects only carry the AI label, with almost no real applications or revenue on-chain. Institutional funds need to enter with a logic that can generate cash flow or user scale, which the AI sector struggles to meet in the short term.
Poor volatility and liquidity
AI concept tokens generally have a small circulating supply and poor depth; once funds withdraw, they tend to quickly fall back, making this trend unsuitable for large funds to engage repeatedly.
The focus of narratives has been taken over by Web3 games and RWA
At different stages of a bull market, the market will rotate through various sectors, and AI is currently in a "forgotten" stage, waiting for the next round of capital inflow.
In order for them to strengthen, it usually requires a major AI application landing news (such as an on-chain AI assistant being integrated by a major company) + mainstream sectors reaching a later stage of capital overflow, which will create opportunities for explosive growth.
