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Crypto is big, but it never quite got the wide adoption its proponents were aiming for. Never mind that it has a market cap of $4T or whatever, that’s just crypto weirdos trading with one another and pretending that trading prices mean value. The amount of liquidity available to turn crypto into usable cash is minuscule.

The thing that crypto has going for it is that it was never designed to do anything useful. Its entire value is in being a store of value that is valuable because people treat it as a store of value. It has nothing else to prove to anyone for it to maintain itself. Whether it continues to maintain its value is questionable, but it’s hit a point of modest stability because it did the job of getting a bunch of retail investors to buy in and hold forever, which was the goal, and that situation can last as long as those retail investors continue to diamond hand their assets en masse.

AI isn’t in the same position. It’s not enough that lots of people are telling everyone that AI is good, or that big dollars are going into it. To be successful, AI has to eventually turn into surplus dollars. In order for it to do that, people have to pay for it, and on the order of hundreds of billions of dollars a year. I’m not saying that won’t happen, because who knows? The market can stay irrational for a very long time. But the market does eventually demand returns, and those returns depend on a lot of factors that are currently not manifesting.

Basically, crypto is stupid, but it makes sense in that it serves the intended purpose. It’s still a bubble, but it’s a bubble that can stay inflated for a long time because of the nature of the asset. AI is a bubble that needs a lot more cash to sustain. If it is to be sustained, it’ll likely be governments writing increasingly large checks for useless technology in perpetuity, which is a real thing that could happen. It’s very, very stupid, but the alternative is that the line go down, so hard to say which is more likely to happen.