The party has returned since the Fed’s big rate cut last week. Up feels a lot better than down.

WIF is back above $2 as I write this, Solana is above $150, and there’s hardly a token on my watchlist not up 20-100% on the week. Popcat even popped above a billion market cap.

With exuberance high, let’s double down and talk about a token that taps into the most exuberant narrative in tech today — AI.

Exuberance on top of exuberance - it doesn’t get better than this.

I’m talking about Akash Network (AKT), one of the few real businesses not only in crypto, but in small cap AI too.

Akash is having an incredible year, and the market hasn’t fully come around to Akash’s potential yet. We’re early, soooo early.

Market Vibes

Crypto Reads

This is a must read. Every crypto investor needs to see this: New information suggests biden admin regulators deliberately killed off crypto-friendly Silvergate in an attempt to decapitate the us crypto industry

Rich Country, Poor Country: Very small increments in economic growth make major differences in quality of life

Akash Network: Crypto x DePIN x AI

Akash Network is a decentralized cloud computing marketplace built on-chain. It leverages underutilized cloud capacity to provide a more cost-effective and flexible alternative to traditional cloud service providers like Amazon Web Services (AWS), Google Cloud, or Microsoft Azure.

Basically this means that developers can rent hardware that’s spread out in data centers, basements, and anywhere else all over the world. Mostly data centers though.

Hardware like, for example, GPUs for AI training and inference.

AI is a gold rush, and as you know, the people who make the most in a gold rush are those selling shovels.

Akash is selling shovels. Lots of shovels.

Will Akash go toe-to-toe with AWS? Power the next bleeding edge foundational model? No. Not for a while anyway.

However, we are in an AI-driven GPU mania. The marginal GPU has never been more valuable. Just because Akash isn’t a trillion dollar mega cloud does not mean that it can’t throw off a lot of cash or that it’s token price isn’t ready to rip.

In fact, I would argue it’s challenger, underdog narrative makes the AKT token even more attractive.

Crypto’s second hottest narrative

DePIN is crypto jargon for “decentralized physical infrastructure.” Think wireless networks powered by little antennas in houses all around your neighborhood (Helium). Or a competitor to Google Maps that collects its data from a little computer that you put in your car (Hivemapper).

Or a cloud computing platform that rents out the spare GPUs you have sitting in your closet to AI companies anywhere in the world.

In all these cases, what makes DePIN so cool is that you can earn tokens for providing the connection to the real world. Put your antenna/mapper/GPU onto the network, and you can get paid.

Its physical infrastructure, decentralized. All of the payments and coordination happen thanks to blockchain.

Akash is not another AI grift like so many supposed “AI tokens.” This is an AI play that’s actually a real business AND it’s also a leading DePIN name. Two narratives for the price of one AKT token.

Akash isn’t just a token. It’s an actual business

Akash allows you to rent and/or use cloud resources on the network. It’s an easy business to understand, and business is good.

Why would a developer choose to train their models or host their app on Akash instead of AWS or Azure?

(If you’ve ever used Google Cloud before, you already know why a dev wouldn’t use it — it’s impossibly complicated to do even the simplest things, and generally sucks.)

Cost Efficiency: 
Traditional cloud services can be expensive. Cloud has been the de facto infrastructure for almost two decades — we’ve reached the max-profit-extraction phase with the current tech giants. Akash reduces costs by utilizing idle computing resources worldwide, offering services at a fraction of the price.

Decentralization: 
Centralized cloud providers are single points of failure and can be susceptible to outages, censorship, or data breaches. Akash’s decentralized model offers better reliability and security. Plus, you can earn token rewards, which is nice.

Flexibility and Accessibility: 
Akash allows users to deploy applications without long-term contracts or vendor lock-in, providing easy control over computing resources.

Scalability: 
The platform can scale resources up or down based on demand like other clouds, but without the centralized bottlenecks. That said, Akash doesn’t operate nearly the same quantity of machines as an AWS or Azure, so there is a limit on how far you can scale with it.

But more than anything else, Akash has capitalized on the GPU opportunity. GPU supply is and will remain constrained for the foreseeable future. Demand is far outstripping supply.

Akash is perfectly positioned to fill the gap for the marginal GPU developer.

The numbers look good too

Here are some highlights from Q2.

New leases increased by 44% quarter-over-quarter (QoQ), reaching over 27,000 leases. You love to see it.

Active leases grew by 11% QoQ, hitting all time highs. Look at this beautiful chart. Up and to the right.

Akash onboarded a daily average of 184 GPUs, a 91% QoQ increase. Average GPU usage hit an all-time high of 93 GPUs, up 55% QoQ. Still quite small compared to Meta or NVIDIA, but growth this fast compounds quickly.

What about the token?

AKT is the utility token at the heart of Akash Network. It’s built on the Cosmos SDK and uses its Tendermint consensus mechanism.

AKT can be staked for rewards, is used to facilitate both leases and payments, and is used as an incentive mechanism to attract users and hardware to the network (for example, Akash recently ran a $5 million incentive to attract more GPUs. It worked! In crypto, sometimes you only need to follow the money.).

Unfortunately, those incentives do have to come from somewhere — in this case, emissions of new tokens — aka inflation.

AKT is fully unlocked, meaning there won’t be any sudden sell moments like other protocols are contending with in today’s low float, high FDV market. But those emissions for incentives do create a nominal headwind of sell pressure that’s worth paying attention to.

The price action has been in line with the market in recent weeks. My systematic program scores AKT as a weak buy (3.5 out of max 20, where 10 is the “average” buy).

The forecast has been trending up though, matching the market as prices re-calibrate to JPow’s easing (thank you money printer).

I’ve owned AKT for some time now, and increased my position by about 50% in the rebalance last month.

I plan to maintain my current position and ride Akash to an early retirement. See you there.

Portfolio Update

No trades this week. I made considerable progress updating my systematic trading program this week, and I’m on track to begin final testing and paper trading it on full-auto in the next week. I’m excited to share more soon.