Most prominent cryptocurrencies closed 2024 in the green, and last month’s brief period of euphoria has now waned.
TL;DR…
- Market Cools Off: Bitcoin hovered between $92K and $94K after a dip. Overall, crypto felt the chill with a 4.9% drop, but hopes are high for a good start to 2025.
- AI Tokens Take a Hit: AI market not spared, shedding 7.9% in value; projects like Livepeer and Spectral lost ~20% apiece.
- AI Agents Buck the Trend: Amid the general downturn, the AI Agent sector shone; eight of the top 10 projects remained green, with Virtuals and AI16Z hitting new highs.
- AI News Highlights: Binance Labs gears up for AI-focused 2025, Fuel Network rolls out an AI Agent tool, ai16z to tweak tokenomics, and Nodepay bags $7M for AI growth.
It’s a new year! 🎆
Most prominent cryptocurrencies closed 2024 in the green, and last month’s brief period of euphoria has now waned.
With expectations reset and one of the most historically bullish periods ahead, hopes are high that the market will see further growth.
But for now, the AI sector appears to be in something of a lull. Let’s take a closer look.
>> Did you miss last week’s AI recap? Check it out here.
Market Overview
The cryptocurrency market hit significant headwinds toward the end of December, with Bitcoin (BTC) briefly falling below $91,500 on Monday.
Source: Bitcoin (BTC) Coin Page
Since then, the original cryptocurrency has reclaimed the $93,600 threshold and is trading between $92,000 and $94,000.
Overall, BTC is down 4.9% in a week.
This turbulence is also seen across practically all sectors. The vast majority of altcoins are in the red over the last seven days, with less than 10% of the top 100 altcoins managing to resist the recent dump.
The CMC Crypto Fear & Greed Index has now been reset to 49/100, indicating the market is currently neither bullish nor bearish. This is a figure not seen since October 2024.
Source: Coinglass
Despite the choppy market, hopes remain high for a strong start to 2025. Historically, cryptocurrency markets have performed exceptionally well in the first quarter following an election year.
Here’s hoping!
AI Market Recap
The AI sector was unable to buck the prevailing bearish market conditions, with nine out of the top 10 largest AI tokens suffering losses over the last seven days.
Source: Top AI & Big Data Tokens Page
Overall, the sector’s market capitalization shrank from $54.1 billion to $49.8 billion in a week, equivalent to a loss of 7.9%.
During this time, several tokens have been hit particularly hard, some notable examples include:
- Livepeer (LPT): lost 20.8%
- Spectral (SPEC): lost 18.7%
- AIOZ Network (AIOZ): lost 18.6%
- Vana (VANA): lost 18.6%
Just a handful of AI tokens managed to weather the storm and maintain a positive return for the week. Prominent examples include:
- Phala Network (PHA): gained 37.6%
- PARSIQ (PRQ): gained 20.5%
- bitsCrunch (BCUT): gained 16.8%
- Mode (MODE): gained 10.6%
Source: Top AI Agents Tokens Page
Despite the broader market downturn, the AI Agent subsector has performed remarkably well this week, with eight of the top 10 largest AI Agent projects in the green over the last seven days.
Several prominent AI Agent tokens hit all-time highs over the last week, including Virtuals Protocol (Virtual) which briefly touched $4.12—becoming the 33rd-largest cryptocurrency by market cap.
Meanwhile, ai16z (AI16Z) more than doubled its value over the last week, reaching $1.88. It is now the second-largest AI Agent project by market capitalization (mcap) behind Virtuals Protocol.
>> Click here to keep tabs on your favorite AI Agent projects.
Per DefiLlama’s narrative tracker, the AI sector was one of the top three best-performing categories over the last week, achieving a mcap-weighted relative growth of 6.03%. Its performance was only exceeded by meme coins and the PolitiFi sectors.
AI News Roundup
Despite the festive period, the AI sector continued to blossom in the background. We’ve collected some of the most significant news to keep you abreast of the latest developments.
Binance Labs Announces Rebrand and AI Focus in 2025: Binance Labs is set to become an independent entity but will continue using the Binance brand under a licensing agreement. They've recently invested in Kernel, which uses decentralized AI coprocessors and ZK proof aggregation protocols to enhance economic security and scalability within the blockchain ecosystem.
Fuel Network To Launch Its First AI Agents: Fuel has launched an AI tool called Fuel Agent Kit, which facilitates the connection of AI agents to the Fuel platform and various associated applications. Users can also build new AI agents using this tool, enhancing functions like transfers, trading, and asset management on the Fuel blockchain. Meanwhile, Fuel Network continues to suffer from FUD related to its V1 to V2 token migration, being branded a “scam” for forcing a defacto 24-month vesting schedule on previously unlocked V1 tokens.
Ai16z Considers Tokenomics Revamp in 2025: AI Agent-led investment DAO ai16z is adjusting its tokenomics in anticipation of potentially launching a layer-1 blockchain. The team is enhancing its platform to increase token value accrual and is planning to implement an AI-focused blockchain to support developments in decentralized AI technologies.
Nodepay Completes $7 Million Additional Funding Round: Nodepay, a decentralized AI platform, completed its second round of financing, raising a total of $7 million. This funding round included investors like IDG Capital, Elevate Ventures and others. Nodepay aims to democratize AI training via real-time data retrieval, using idle internet bandwidth to support AI model development.
>> That’s all for this week’s recap. Join us next week for more AI news, updates and developments.
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