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A new Coingecko report has revealed key crypto asset trends in the first quarter of 2025, with memecoins and artificial intelligence (AI)-themed tokens leading the charge.
Dubbed the 2025 Q1 Crypto Industry Report, the study covered major verticals across digital asset markets. Per the report, total market capitalization fell by 18.6% in Q1 after reaching a peak of $3.8 trillion in mid-January.
BTC still holds a sizable share of the market capitalization, while the top ten digital assets raced for new places, with XRP rising in the ranks.
In terms of narratives, market participants appear to chase similar trends from previous quarters. Coingecko’s quarterly report reveals a rising interest in AI-themed tokens and memecoins, mirroring Q4 of 2024.
Both verticals captured 62.8% of investors’ interest, with AI tokens snagging 35.7% while memecoins held onto a falling 27.1% share in the first quarter. The rising interest in both memecoins and AI-themed tokens saw both verticals occupy eleven of the top 20 digital asset narratives in Q1.
“Memecoins and AI continued being the crypto narrative of choice in Q1 2025 trending categories,” said Coingecko COO Bobby Ong on X. “Seems like we have yet to see another new narrative emerge and we are still following past trends.”
Despite the sustained interest, memecoins and AI tokens recorded steep losses in the first three months. Memecoins appear to be the hardest hit of the lot, with the top five largest memecoins by market capitalization recording double-digit losses in Q1.
While AI tokens mirrored the broader decline of digital asset prices, Story Protocol (IP) managed to post a 152% gain in the period under review. The mainstream adoption of AI chatbots fuelled renewed interest in digital asset markets, with previous quarterly price performance stoking renewed interest.
The boom and bust of memecoins in Q1
Memecoin activity reached a frenzy following the Official Trump ($TRUMP) memecoin in January. As traders thronged to the markets, Solana and Coinbase (NASDAQ: COIN) gained the most from the memecoin craze in Q1 2025, given soaring trading volumes.
Things came to a head after Libra, a memecoin endorsed by Argentinian President Javier Milei, tumbled by 94% amid an insider trading scandal. Following the jarring Libra incident, memecoin interest in Q1 began its steady decline, with activity on Pump.fun waning from its previous highs.
AI startups receive 57% of VC funds in Q1 2025: report
Artificial intelligence-based startups have received most of the share of venture capital (VC) funding in the first three months of 2025.
According to a report released by Pitchbook, VC had a “FOMO” issue and invested in AI-based startups in recent months. Per the report, 57.9% of VC dollars were funneled into AI and machine learning startups globally, driven by several key factors.
The report notes that interest in the underlying technology is at an all-time high, driven by the sustained VC interest in Q1. Alongside rising AI interest is the fear of missing out on VC firms.
“The fear of somebody else winning your market has never been higher than it is now,” said Freestyle Capital general partner Maria Palma. “You haven’t seen a slowdown because the rate of change on the technology side is almost indigestible.”
The report predicts that the increased funds invested in AI startups will have several unintended consequences. Pitchfork analysts say the frenzy will birth uneven outcomes for investors.
647 Ventures co-founder Nnamdi Okike disclosed that investors are increasing the size of their bets without a proper strategy for return on investment (ROI). While investors face the grim realities of lopsided returns, experts say the inflow of unprecedented levels of capital may affect the ability of startups to achieve sustainability earlier.
“When a new market comes along, VCs kind of lose their head a bit, and just flood in without really understanding the underlying economics of a category,” said Okike. “The jury is out on the economics of a lot of them.”
The figures for AI spending by VC firms in Q1 are growing, far from blockchain funding. While Web3 startups raised only $4.6 billion in the first quarter, AI startups received a staggering $73 billion in the same period, with a sizable chunk being OpenAI’s Softbank-led $40 billion funding round.
In terms of regional distribution, North American AI and machine learning startups are receiving the largest slice of the pie. Across the Atlantic, European AI firms are commanding impressive VC funding, while Southeast Asian startups are closing the gap.
A clear streak of AI interest
AI-focused companies are not the only ones pursuing funding, with several corporate entities interested in integrating emerging technologies into their operations. For several enterprises, generative AI is a low-hanging fruit in the quest for digitization, underscored by rising adoption rates.
A Cisco report disclosed that over 90% of Saudi companies have advanced strategies for AI integration, but real-world readiness stands at only 8%. Firms keen on embracing AI must adhere to steep implementation costs, employee upskilling, and a barrage of security concerns.
In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.
Watch: Demonstrating the potential of blockchain’s fusion with AI
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