NEAR Protocol (NEAR) has secured a leading position in the burgeoning artificial intelligence (AI) sector within the cryptocurrency market, a new report from market maker Wintermute confirms. This pivotal development, highlighted in Wintermute’s findings published around 2024-03-05, unfolded even as the wider digital asset industry experienced a substantial capital exodus.
The report underscores how NEAR bucked a prevalent market downturn, positioning itself as the primary beneficiary of a narrative shift towards AI-focused tokens. Investors, confronted with a challenging macroeconomic landscape, began reallocating capital, with NEAR Protocol emerging as a standout performer.
Federal Reserve Rhetoric Fuels Crypto Outflows
The broader crypto market faced significant headwinds driven by the US Federal Reserve’s hawkish stance on monetary policy. This rhetoric signaled a continued tightening, with minutes from a recent Fed meeting indicating expectations for another rate hike before year-end, pushing the yield on 10-year US government bonds to a multi-year high of 5.24%.
Traditional financial markets reacted divergently; the S&P 500 index reached a record high, climbing 1.2% for the week. This gain was attributed to robust corporate earnings growth, which was up 29% year-over-year, effectively offsetting the impact of higher borrowing costs.
However, the cryptocurrency sector lacked this fundamental corporate earnings support, resulting in sharp declines. Spot Bitcoin Exchange-Traded Funds (ETFs) recorded weekly outflows of $679 million, marking the highest such figure since June. Ethereum ETFs also saw substantial withdrawals, totaling $542 million.
Market data from CoinGlass revealed widespread distress, with forced liquidations amounting to $1.19 billion, of which $1.06 billion were long positions. Bitcoin’s price dipped 3.2% to $83,000, while Ethereum plunged 7.0% following a reputational hit after an Ethereum Foundation researcher publicly advised users to migrate to new addresses.
NEAR Protocol Defies Altcoin Slump
The brunt of the market correction struck the altcoin sector particularly hard, where the median decline was 3.7%. UNI, a recent leader, saw a dramatic collapse of 15.8%. Out of the 66 largest projects monitored, only 11 managed to close the week in positive territory.
Despite this widespread market turmoil, NEAR Protocol demonstrated remarkable resilience. Historically positioned as an AI-oriented blockchain, the project largely ignored the general market storm. After a brief, symbolic dip, NEAR aggressively continued its growth trajectory, seizing leadership within the AI crypto segment.
Wintermute identified two primary catalysts behind NEAR Protocol’s impressive momentum. One key factor was a significant technological advancement: the network rolled out support for post-quantum digital signatures, a move designed to substantially strengthen its security infrastructure. This upgrade signaled a forward-looking approach to blockchain security in an evolving technological landscape.
The second driver involved market mechanics, specifically a powerful short squeeze. Bears, anticipating a broader market decline, attempted to short NEAR alongside other cryptocurrencies. However, this speculative move backfired, triggering forced buybacks of short positions that only accelerated the token’s upward surge, reinforcing its market strength.
NEAR’s Foundational AI Infrastructure
NEAR Protocol has long articulated its ambition to be the “blockchain for AI,” providing essential open infrastructure for various components of the AI product stack. This includes facilities for private computing, model training, monetization, hosting, and the development of AI agents and assistants. Its architecture is specifically engineered for user-owned, verifiable AI systems.
The protocol utilizes hardware-secured infrastructure, incorporating technologies like Intel TDX and NVIDIA Confidential Computing, to ensure data privacy and integrity. Every request processed on NEAR operates within a Trusted Execution Environment (TEE) with real-time verification, guaranteeing that data remains both encrypted and isolated from external interference.
The foundational AI expertise at NEAR runs deep. Co-founders Illia Polosukhin and Alexander Skidanov both possess extensive backgrounds in machine learning. Notably, Polosukhin co-authored the seminal 2017 paper “Attention Is All You Need,” which introduced the transformer architecture—a cornerstone for many of today’s advanced AI models. This deep-rooted expertise provides a strong technical underpinning for the protocol’s AI ambitions, distinguishing it from many competitors.
To enhance scalability, NEAR employs a sharding model known as Nightshade, which processes transactions in parallel. This allows the network to handle a higher throughput of operations, crucial for supporting data-intensive AI applications.
Recent developments underscore NEAR’s commitment to its AI roadmap. In February 2026, NEAR launched IronClaw, an AI assistant focused on security operating within isolated WebAssembly environments. This was followed by the integration of Venice, an AI platform, with NEAR AI in March 2026, enabling verifiably private model inference.
The protocol’s “Confidential Intents” model allows users to define desired outcomes without exposing their underlying strategies, with execution taking place in private environments supported by its sharded architecture and secure enclaves. By April 2026, the cumulative Intents volume on NEAR had surpassed $6 billion, with all five major NEAR wallets supporting the feature.
Moreover, Brave Browser integrated native Intents in March 2026, extending access to over 70 million users, further solidifying NEAR’s reach in the growing altcoin ecosystem.
Wintermute’s Diversified Investment Strategy
The report from Wintermute not only highlighted NEAR Protocol’s success but also provided insight into the market maker’s own strategic shifts. Wintermute plans to inject approximately $1 billion over the next five years into high-frequency trading and AI data center infrastructure, signaling a broader diversification.
This significant investment aims to expand Wintermute’s footprint beyond crypto into traditional financial markets, including equities, commodities, and currencies. CEO Evgeny Gaevoy has articulated an ambitious goal: for non-crypto market activities to constitute over 50% of the company’s business by the close of 2027, a considerable jump from its current 10%.
Wintermute intends to fund this expansion through retained earnings, having reported profitability in 2025 and projecting continued profitability for 2026. This financial health provides a strong foundation for its aggressive diversification plans.
The company’s average daily trading volume did see a decline, from about $15 billion in 2025 to $10 billion in 2026, reflecting broader market conditions. However, Wintermute is actively counteracting this by scaling its operations. They plan to double the staff at their 17-person New York office in 2027 and increase their global headcount by roughly 40%, demonstrating a clear commitment to growth.
Further bolstering its move into traditional finance, Wintermute’s US affiliate secured broker-dealer status. This crucial regulatory approval allows the firm to trade stocks and stock options, as well as act as an authorized participant for ETFs, marking a significant step in its cross-market expansion. This strategic move highlights how strong leadership in altcoin projects can foster broader market engagement.
Navigating Future Market Risks
Despite NEAR Protocol’s individual success, Wintermute maintains a cautious outlook on the broader altcoin market. The firm advises against buying altcoins on rebounds until US government bond yields stabilize and net inflows return to Bitcoin ETFs, deeming such actions an unjustified risk in the current climate.
The market’s immediate focus is now shifting towards upcoming fresh US inflation (CPI) data and the financial reports from major tech giants. These indicators are expected to play a critical role in determining whether the global AI trend can continue to supply the necessary liquidity to the industry, supporting further growth in AI-centric tokens.
The current environment highlights a stark contrast between traditional finance’s resilience and crypto’s vulnerability to macroeconomic pressures. While the S&P 500 can lean on corporate earnings, digital assets often rely more heavily on sentiment and speculative capital, making them particularly sensitive to interest rate hikes and broader economic uncertainty.
This situation underscores a broader trend: as regulatory landscapes evolve and traditional financial institutions increasingly engage with digital assets, the lines between the two markets are blurring. Investors will need to keenly monitor both global economic indicators and specific blockchain developments to navigate this complex environment.
The success of projects like NEAR Protocol could set a precedent for how other altcoins adapt to shifting investor preferences.
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