How AI Narratives and VC Capital Are Powering the Crypto Market

AI Tokens Stay Hot as Grayscale Highlights the Sector’s Momentum

If any theme rivaled big Bitcoin bets this month, it was the continued outperformance of AI-related altcoins – a trend now officially acknowledged by major industry players like Grayscale. In a new research piece, Grayscale introduced an “Artificial Intelligence Crypto” sector, shining a spotlight on 20 AI-focused tokens that together boast over $20 billion in market cap.

Within this AI sector, several tokens are standing out for their exceptional market momentum. According to analytics, the top coins by a metric called “Bullish Period” – which tracks how often a coin posts notable daily gains – are led by Virtual, AIXBT, Kaito, and AI16Z.

The fact that these kinds of tokens are regularly charting double or triple-digit percentage gains shows the voracious appetite for anything AI-related in crypto. Traders are actively rotating into AI narrative coins, anticipating that as AI tech booms globally, the “picks and shovels” of AI in crypto will also flourish.

Another angle to consider is how AI tokens are now intersecting with institutional interest. We see VC funding flowing in (as discussed with World, Nous, etc.), and now even Grayscale – known for its Bitcoin and Ethereum trusts – is examining AI assets.

It wouldn’t be surprising if down the line we see specialized investment vehicles or indices for AI crypto, given the attention. For now, investors should note that the AI sector’s combined $20B+ size means it’s becoming a significant slice of the market. Key tokens like Virtuals, KAITO, Injective, and others could increasingly drive market sentiment.

Of course, volatility remains high – as hype can fade quickly – but at least for May 2025, the AI crypto craze remained in full swing.

Check: https://dropstab.com/tab/grayscale-ai-assets

Institutional Cash Floods into Crypto AI Projects

The standout trend of May was the surge of institutional and venture capital into AI-focused crypto projects, underscoring a powerful convergence of two red-hot sectors: crypto and artificial intelligence. New data from spring funding rounds shows that investors are pouring serious money into blockchain-AI startups, signaling conviction that AI could be a major growth driver in the crypto economy.

Leading the pack is Worldcoin’s “World” project, which secured a massive $135 million in recent funding – the largest AI-blockchain raise of the season. Worldcoin (helmed by Sam Altman) is building a decentralized biometric ID and financial network (World ID), illustrating how AI and crypto can combine (in this case using iris-scanning orbs for identity) to tackle global digital identity.

That enormous raise was followed by Nous Research with $70 million, and Goodfire with $50 million in funding. Nous is said to focus on AI-driven research tools, while Goodfire specializes in AI interpretability (helping explain and audit AI model decisions).

This infusion of over $250M into top AI crypto projects in a single spring underscores a theme: institutional capital is actively hunting for the next big platform at the intersection of AI and blockchain. The funded projects span a range of cutting-edge fields – from AI-based social security (Doppel) and generative AI platforms (Mahojin) to smart video AI (Hedra) and AI-powered finance (Catena Labs). Such diversity shows that investors see potential for AI to disrupt multiple aspects of the crypto ecosystem.

Full details on the latest fundraising rounds: https://dropstab.com/latest-fundraising-rounds