🤖 The AI crypto portfolio

GM everyone. This is 2036.

We’ve talked a lot about memes recently.

And for good reason: memes are massively outperforming everything else.

But there’s another sector with a lot of potential that’s yet to pop.

AI.

I’ve written extensively about my biggest bets for this cycle: AI, Solana memes, and gaming.

This week, Grayscale - one of the OG crypto investors - announced a new crypto AI fund, which signals some institutional demand for the AI crypto trade.

This is a good opportunity to look at:

• the AI trade in general

• what’s in the fund

• what we might add

So - what’s the state of crypto AI today?

Like many other narratives (including gaming), crypto AI coins peaked in March and haven’t made a higher high since then.

Many are down 50-70% in the last couple of months.

Now - remember that crypto trades on attention.

In the absence of exciting updates from either:

• OpenAI (& competitors) or

• companies applying AI to their businesses

… crypto investors have turned their heads elsewhere, mostly to memes and the ETH ETF trade.

It doesn’t help that in the traditional finance world, NVIDIA stock is down -12% from its highs, and the general AI sentiment is getting cautious:

In the last few weeks, many big crypto AI names like NEAR and TAO are up 50%+.

But I’d attribute that mainly to the wider market recovery than to the rebirth of the AI narrative.

That said, Grayscale evidently thinks these names could go much higher. They wouldn’t launch a fund if they didn’t already have demand for these coins.

So what’s in their fund?

• NEAR

• Filecoin (FIL)

• Render (RNDR)

• Livepeer (LPT)

• Bittensor (TAO)

I’ve covered all of these (except LPT) several times before. And they probably form a solid AI portfolio.

If you were feeling frisky, you could add PRIME (building an AI-powered game) and NOS (an expression of the trade on Solana) to that mix.

That should allow you to capture a substantial % of the upside if/when the AI narrative catches on again.

This aligns with my thesis of mostly buying existing winners (here and here).

At this stage of the cycle, new coins will emerge—yes, but many of the winners have already been identified.

So save yourself the headache of trying to 100X from here. Instead, just capture 5-20X on the largest coins in their respective categories.

Now - like with most narratives, I wouldn’t bet the farm on the AI trade just yet.

Memes have gotten much more sustained mindshare this cycle than even I imagined.

And that’s from someone who writes a newsletter called ‘crypto, memes and macro.’

I’d like to see some sustained momentum in AI before investing more.

I expect the market will need:

• Bitcoin to make all-time highs OR

• some major news in the AI world

… before AI takes center stage again.

But I think AI is probably a good bet if you want to diversify out of memes—or don’t want to get into them in the first place.

I’ll keep monitoring the AI trade and update you on any particular coins worth adding to the portfolio + on revived momentum in the narrative.

P.S. You can buy the Grayscale fund in your brokerage account, but I don’t love its structure.

The fund will trade at heavy premiums during bull markets and heavy discounts during bear. Better to just buy the coins directly on Coinbase/Binance.

1/ Mark Cuban says Silicon Valley’s embrace of Trump revolves around crypto

2/ Bitwise: “Ether ETF flows will push ETH beyond $5K”

3/ Grayscale launches new AI fund

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.