In a move aimed at capitalizing on the growing potential of decentralized artificial intelligence (AI), Bitcoin ETF issuer and crypto asset manager Grayscale has officially launched its new Decentralized AI Fund, which aims to provide investors exposure to protocols within the AI sector of the crypto ecosystem.

With a quarterly rebalancing strategy, the Grayscale Decentralized AI Fund currently holds decentralized AI crypto protocols, including Bittensor (TAO), Filecoin (FIL), Livepeer (LPT), Near (NEAR), and Render (RNDR).

Grayscale’s Latest Fund Offering

Rayhaneh Sharif-Askary, Grayscale’s Head of Product & Research, expressed optimism about the launch of the firm’s new artificial intelligence fund, saying: 

The rise of disruptive technologies has created compelling opportunities for Grayscale’s investors since our 2013 inception, and we believe the launch of the Grayscale Decentralized AI Fund provides an opportunity to invest in Decentralized AI at its earliest phase. 

Sharif-Askary emphasized the alignment of blockchain-based AI protocols with the principles of decentralization, accessibility, and transparency, highlighting their potential to mitigate risks associated with the proliferation of AI technology.

It was also announced that the Grayscale Decentralized AI Fund incorporates three primary categories of decentralized AI assets. First, it includes protocols that build decentralized AI services like chatbots and image generation services. 

Secondly, the fund encompasses protocols that develop solutions to centralized AI-related issues, including authentication checks against bots, deep fakes, and misinformation. 

Lastly, the fund comprises infrastructure and resources, which are believed to be critical to AI technology development, such as decentralized marketplaces for data storage, GPU computation, 3D rendering, and streaming services.

As of July 16, 2024, the Grayscale Decentralized AI Fund’s component assets and their weightings were announced as Bittensor at 2.92%, Filecoin at 30.59%, Livepeer at 8.64%, Near at 32.99%, and Render at 24.86%.

Impact On Prices

Notably, Grayscale’s announcement on Wednesday has had a significant impact on the protocols’ native tokens, with a clear example being Bittensor’s TAO token, which has jumped 9% in the 24-hour time frame to a current trading price of $323, adding to its 40% uptrend recorded over the past two weeks. 

Filecoin’s FIL token also saw an increase of nearly 8% in the same time frame, with its price trading just below the $5 mark at $4.76. However, CoinGecko data shows that FIL’s price is trading 97% below its all-time high of $236 recorded in April 2021. 

The native token of the blockchain platform focused on creating a decentralized video platform, Livepeer, recorded the highest surge, with price gains of over 12% in the past 24 hours, resulting in a current trading price of $16.53. 

The last two protocols that have less significant impact are Render’s RNDR token, up only 3.2%, trading at $6.81. On the other hand, the Near protocol’s native token NEAR is down 1.2%, the only token to post a negative performance after Wednesday’s announcement. 

Featured image from DALL-E, chart from TradingView.com