Blockchains and artificial intelligence are complementary technologies, according to crypto asset manager Grayscale, even though the markets have recently treated them as part of the same trade.
Zach Pandl, Grayscale’s head of research, said that while disruptive technologies often produce clear winners and losers, the relationship between AI and blockchain is symbiotic rather than competitive. The rapid adoption of AI is expected to reward some sectors, such as chip makers, while putting pressure on other sectors, including professional services segments.
“While cryptocurrency valuations have been closely correlated with the decline in software stocks, we think blockchains and AI are complementary from a fundamental standpoint,” he said in Wednesday’s blog post.
US stock markets have been on the downtrend lately. The S&P 500 software index is down about 20% year to date, and cryptocurrency valuations have moved closely with the sell-off. But Pandl argues that the parallel decline obscures a more constructive long-term dynamic between the two technologies.
Investor concerns about the disruptive potential of artificial intelligence have led to a broad sell-off in technology and software stocks, wiping out significant market value as traders reassess long-held valuations.
U.S. software and services stocks have fallen sharply, wiping out about $1 trillion in market capitalization, as fears grow that rapidly advancing AI tools could upend traditional business models and revenue streams.
The S&P 500’s software index has slumped as investors retreat from high-flight tech names amid heightened volatility and skepticism about how quickly and profitably AI adoption will proceed.
Pandl claims that blockchains will likely become the financial rails for AI agents. Today’s chatbots largely operate outside the financial system. But if AI agents are equipped with digital wallets, he expects they will conduct transactions via blockchains rather than traditional banking infrastructure.
Blockchains offer transparency, near-instant settlement, 24/7 availability and global reach with an internet connection, he said. While opening a bank account requires a human intermediary, any user, including a bot, can create a blockchain address. Pandl said rising volumes of low-value stablecoin transactions would be an early signal that this thesis is becoming a reality.
At the same time, he argued that blockchain technology could help mitigate some of the risks of AI. As large language models proliferate, concerns about data provenance, deepfakes, and the concentration of control over resources and decision-making are likely to increase. Public blockchains can provide verifiable data and a more decentralized infrastructure to offset these trends, according to Pandl.
The report acknowledged that AI can also introduce new challenges to crypto networks. Advanced tools can make blockchain surveillance more effective, potentially compromising user privacy. AI agents can also discover new vulnerabilities in smart contracts; OpenAI recently launched EVMbench, an initiative aimed at using AI to identify and patch such risks.
Read more: Crypto isn’t losing to AI, ‘capitalism is doing its job,’ says Dragonfly