Shapeshifting AI Bubble

Return to the king

It’s been hard for anyone to miss that AI agent mania that we have experienced over the last month or that gave us the next iteration of the generational AI trade. The first iteration started with none other than Bittensor which offers decentralized infrastructure in the form of an L1 that you can build machine learning models on. It operates different subnets using the initial Polkadot Substrate model. TAO became the poster child of the AI trade that delivered generational wealth to people who were able to identify it early.

From early 2023 up until early 2024, TAO was the centerpiece of attention but has taken a backseat since then due to being criticized for its inflationary tokenomics model (similar model to Bitcoin) that led to unsustainable sell pressure as the price skyrocketed and it has underperformed since. We have seen other plays like FET and RNDR perform very well during the same type which made up a solid basket.

This was round 1.

We recently got round 2 through the inception of Truth Terminal which is an AI Agent created by Andy Arrey, this agent then proceeded to create its own memecoin called GOAT and the rest is history. As this kickstarted the next iteration of AI through AI agents, Virtual took it to the next level as the Pump Fun of AI Agents essentially. Not going to dive into it at a deeper level here as it was covered in this article here at 350m market cap.

This led to an AI infrastructure mania that pushed AI16z to billions as well.

However, as most people have noticed, profit-taking has been rewarded as the AI bubble continues to shapeshift in different forms that force you to adapt at all times. There is one thing that is flying under the radar at the moment that has the chance to capture significant attention again.