From AI to DeFi: most profitable crypto sectors

​The cryptocurrency market is diverse, comprising numerous segments. While some projects deliver significant profits, others may leave investors empty-handed. To stay “in the black,” one must navigate trends effectively.

Key crypto narratives

The past year was marked by Bitcoin ETF approvals and a frenzy in the crypto market following Donald Trump's election victory in the United States. These events spurred growth across nearly all assets, with some performing better than others.

Contrary to popular belief, Bitcoin was not the most successful asset on the market in 2024. According to analytics service CoinGecko, the most profitable narrative in the crypto industry was artificial intelligence (AI), with projects delivering returns of up to 2940%.

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Memecoins and RWA followed, with returns of 2185% and 820%, respectively. Closing the rankings of profitable narratives were L1 solutions (142%), DePIN (135%), and DeFi (101%).

Let’s explore each popular narrative in detail to uncover their secrets to success.

Artificial Intelligence

The world’s most popular AI product, ChatGPT, set the global trend for artificial intelligence. Though launched by OpenAI in 2022, it wasn’t until late 2023 that the project began using current data for analysis. By the end of 2024, ChatGPT’s weekly audience exceeded 300 million users.

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Although ChatGPT isn’t part of the crypto industry, its influence spurred the adoption of AI across various sectors. Crypto projects actively integrated AI into their products, positively impacting their token valuations.

AI tokens are not among the top cryptocurrencies but demonstrate consistent growth, securing their position as the most profitable narrative according to CoinGecko. Let’s delve into the specifics of AI in crypto through examples.

Projects like NEAR Protocol, Internet Computer, Bittensor, and Artificial Superintelligence Alliance actively incorporate AI into their ecosystems to enhance performance and functionality. NEAR Protocol leverages AI for optimizing transactions and resource allocation, reducing fees and speeding up data processing.

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Internet Computer uses AI to manage the distribution of computing power and data across its decentralized network, improving performance and automating threat detection.Bittensor employs AI to create a decentralized machine-learning network where algorithms can learn and exchange data. Artificial Superintelligence Alliance focuses on coordinating efforts among researchers and companies developing advanced technologies.

The diversity of AI applications in the crypto sector underscores why such projects consistently attract multi-million-dollar investments.

Memecoins

Memecoins are much simpler to understand. At the heart of these tokens lies humor. This concept gave rise to popular cryptocurrencies like Dogecoin, Shiba Inu, Pepe, Floki, and many others.

Elon Musk set the trend by actively promoting Dogecoin on Twitter (now X) and subsequently other memecoins. His posts consistently attracted trader attention, driving the value of these assets upward.

Memecoins evolved into a distinct sector of the crypto market, delivering impressive returns throughout the year. Projects on the Solana blockchain and the Pump.fun platform deserve special mention. Pump.fun became a launchpad for Solana-based memecoins, enabling even novice investors to capitalize on the trend. Over two million tokens were launched on this platform in a year.

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RWA

RWA (Real World Assets) refers to physical or financial assets like real estate, commodities, bonds, or artworks that are digitized and integrated into blockchain ecosystems. This involves tokenizing assets into digital coins for buying and selling.

The leading token in this market last year was Ondo, the native currency of Ondo Finance, a project specializing in decentralized investment products. Its popularity soared after releasing tokenized versions of U.S. bonds.

However, it later lost its top position to MANTRA, a platform allowing investments in real assets such as real estate or financial instruments. By November 2024, MANTRA had entered the Top 50 cryptocurrencies.

In November, MANTRA demonstrated explosive growth, enriching early investors. For instance, one trader turned $38,700 into $6.27 million simply by holding the token for 18 months.

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L1, DePIN, and DeFi

Next, we’ll explore three sectors with similar profitability. Starting with L1—Layer 1 solutions. These are popular cryptocurrencies with their own blockchains.

Bitcoin remains the trendsetter, surpassing the $100,000 mark in autumn and maintaining its position as the industry leader. Following Bitcoin, other digital assets have also grown. Besides BTC, the market leaders in capitalization include Ethereum, BNB, Solana, and Cardano.

DePIN (Decentralized Physical Infrastructure Networks) are decentralized networks combining traditional physical assets with blockchain technology. They utilize tokenization and smart contracts to manage resources like power grids, IoT devices, transportation systems, and telecommunications networks.

Unlike centralized infrastructures, DePIN allows participants to own, manage, and earn rewards within the network. The standout project in this segment is Render, a platform enabling users to share excess computing power for tasks like 3D rendering and animation processing.

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Finally, DeFi (Decentralized Finance) experienced challenging years recently, with many protocols downsizing or shutting down. Despite this, the sector showed resilience, with projects like Chainlink, Uniswap, and Aave leading its recovery. By the end of 2024, DeFi’s TVL (Total Value Locked) reached $122 billion, signaling the sector’s revival.

Conclusion

The 2024 crypto market demonstrated diversity and profitability. Artificial intelligence, memecoins, and RWA led the way, showcasing innovation and market adaptation. Other segments, such as L1, DePIN, and DeFi, also contributed significantly to the industry’s development, despite delivering comparatively moderate returns.

The financial achievements of these projects highlight the importance of analyzing trends and diversifying investments to succeed in the crypto market. Whether it’s AI, real asset tokenization, or decentralized infrastructure, 2024 proved that innovation remains a key driver of progress and profitability.