AI Crypto- Best and Worst Performing Cryptos in December 2024
AI Crypto– The cryptocurrency market has witnessed significant shifts in narrative performance, especially in the final month of 2024. Artificial intelligence (AI)-driven projects emerged as clear winners, while meme coins and modularity-based projects faced notable declines. Here’s a deep dive into the winners and losers of the crypto market during this transformative period.
AI-Driven Cryptos Lead the Pack
AI-focused tokens have made a strong case for themselves as the most promising narratives of the year. According to recent data from Web3 analytics platform Dexu AI, AI-driven projects generated an impressive 72.2% return in December alone. Among these, ai16z (AI16Z) and Phala Network’s PHALA token led the charge with substantial gains. AI16Z surged by nearly 295%, while PHALA witnessed an impressive 209% increase in value over the past 30 days.
Other notable AI-driven performers include Virtuals Protocol (VIRTUAL), which gained 132%, and the AiXBT token, which rose by 125%. The growing demand for AI technologies in the crypto space has captured significant investor interest, with many believing that AI could play a pivotal role in shaping the future of digital finance. Notably, Bitfinex highlighted how AI agents are poised to revolutionize crypto by automating tasks like transaction execution, wallet management, and crafting sophisticated investment strategies.
Centralized Exchange (CEX) Tokens: A Strong Performer
While AI was the clear leader, Centralized Exchange (CEX) tokens also had a strong showing, rising by 41.37% throughout December. CEX platforms, like Binance and Coinbase, continue to dominate the exchange landscape, and their native tokens, such as Binance Coin (BNB), have seen steady growth.
In addition to CEX tokens, another promising sector, referred to as the “sweat-spot” sector, which focuses on projects combining blockchain functionality with user-centered applications, saw a respectable 24.4% rise. These sectors are thriving as projects increasingly aim to bridge the gap between blockchain technology and practical, real-world applications for users.
DeFi, Derivatives, and Real-World Assets: Slow but Steady Growth
Traditional sectors like Decentralized Finance (DeFi) and derivatives had a relatively quieter month but still posted steady growth. DeFi projects saw a growth rate of 13.2%, while the derivatives market grew by 12.3%. This indicates that despite the dominance of newer narratives, established sectors like DeFi continue to show resilience in the market.
Additionally, real-world assets (RWA) gained 7.21%, demonstrating that tokenized traditional assets are finding increasing traction in the crypto space. These sectors remain vital components of the market, as blockchain technology seeks to integrate with global finance and traditional asset classes.
Modularity Projects and Meme Coins Struggle
While some sectors thrived, others experienced significant downturns. The modularity category, which focuses on scalable and adaptable blockchain solutions, faced a steep 32.1% decline. This category’s loss highlights the challenges faced by blockchain networks attempting to achieve widespread interoperability and modularity.
Similarly, low-risk tokens (LRTs), which are designed to offer a safer investment environment, saw a significant 30.8% drop. This decline reflects investor sentiment shifting away from perceived “safer” bets toward higher-growth sectors like AI.
Perhaps the most notable struggle came from meme coins, which experienced a 28.7% decline over the last 30 days. Despite a report from Binance showing that meme coins had overtaken major cryptocurrencies like Bitcoin and Ethereum in terms of ownership, many of the largest meme tokens, including Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE), saw double-digit declines in value.
According to CoinGecko, meme coins such as Dogecoin, Shiba Inu, and Pepe all suffered significant losses, with dogwifhat (WIF) being the hardest hit, shedding nearly 41% of its value. This downturn in meme coins could signal investor fatigue, particularly after months of speculative trading.
The Struggles of GameFi, Privacy Tokens, and DePIN
In addition to meme coins and modularity projects, other sectors also struggled during December. GameFi (blockchain gaming) experienced a 21.78% drop, signaling potential setbacks in the integration of gaming and blockchain. Similarly, privacy tokens, which focus on enhancing user anonymity, saw a decline of 12.46%.
Furthermore, the decentralized physical infrastructure networks (DePIN) sector, which seeks to tokenize physical infrastructure, also faced challenges and posted losses.
Layer 1 Blockchains Dominate Market Capitalization
In terms of overall market capitalization, Layer 1 (L1) blockchains continue to dominate the crypto space, valued at $2.75 trillion as of December 2024. This market cap is largely driven by Bitcoin, which alone accounts for approximately $1.85 trillion of this value. As the leading cryptocurrency, Bitcoin’s dominance remains unchallenged, and its position as a store of value in the digital asset space continues to solidify.
Centralized exchange (CEX) tokens claim the second-highest market cap at just over $129 billion. Although meme coins have struggled, they still maintain a solid presence in the market, with a total valuation of nearly $86 billion according to Dexu AI.
DeFi and AI tokens follow with market caps of approximately $39 billion and $23 billion, respectively. Despite their strong performance in December, these categories are still relatively small compared to the dominance of L1s and CEX tokens.
Smallest Market Segments
At the smaller end of the market, privacy coins and low-risk tokens (LRTs) continue to struggle, with privacy coins capped at just $2.72 billion as of December 30, 2024. Decentralized science (DeSci), a niche sector focusing on blockchain applications in scientific research, remains one of the smallest market segments, valued at only $284 million.
Evolving Crypto Landscape
The cryptocurrency market in December 2024 illustrated both the volatility and potential within the sector. AI-driven projects have proven themselves as major players, while more traditional sectors like DeFi and GameFi are showing resilience despite challenges. Meanwhile, meme coins and modularity-based projects are facing significant headwinds. As the market evolves, it will be essential to keep a close eye on these trends to gauge where the next major shifts may occur in the crypto world.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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