Despite most AI tokens declining, the sector's market cap grew 2.9%, driven by Bittensor (TAO) gaining 16.8%.
TL;DR…
- Crypto Market Struggles Amid Turmoil: Bitcoin barely slipped, but altcoins dropped sharply, with Ethereum down by 3% and others by 11.6%. Market fear persists, with Bitcoin dominance hitting a four-year high.
- AI Tokens Defy the Trend: Despite most AI tokens declining, the sector's market cap grew 2.9%, driven by Bittensor (TAO) gaining 16.8%. Story (IP) surged 114.3%, leading AI token performance.
- Key AI News & Launches: Kava unveiled the largest decentralized AI model; Figure AI introduced Helix for humanoid robots; and xAI launched Grok 3 to compete with OpenAI’s GPT-4o.
- Kaito AI Airdrop & Sector Growth: Kaito AI launched its KAITO token, gaining 56% despite selling pressure. The AI sector outperformed most others, achieving a 9.1% market-cap-weighted gain.
The last week was…eventful, to say the least.
From the largest hack in cryptocurrency history and rising geopolitical tension in Eastern Europe, to fresh debates about the cryptography-cracking potential of Microsoft’s new quantum chip, the market hasn’t had it easy.
Here, we take a look at how the markets evolved over the last week.
>> Did you miss last week’s AI update? Check it out here.
Market Overview
This week has been plagued by a range of adverse events, sending the vast majority of cryptocurrencies plummeting.
Source: Bitcoin (BTC) Coin Page
Bitcoin (BTC) has held up relatively well over this period, briefly touching almost $99,500 earlier this week to fall back to its current value of around $95,700. It is now down 0.5% over the past seven days.
Altcoins, however, generally fared far worse.
Source: Bitcoin Dominance Page
Bitcoin's market dominance is now sitting at 61.1%, its highest value in almost four years. Meanwhile, Ethereum’s market capitalization (mcap) fell by 3%, and other altcoins dropped by 11.6%.
The CMC Crypto Fear & Greed Index is now at the very cusp of neutral territory, at 40.
Overall, a sense of fear still pervades the market, but glimmers of hope are beginning to shine through.
AI Sector Recap
The last week was another mixed bag for AI tokens. Over half of all AI tokens are down in this period, but a few exceptional projects have completely bucked the trend.
Overall, the sector saw its market capitalization (mcap) grow by 2.9% in the last week to reach $36.1 billion.
Source: Bittensor (TAO) Token Page
This is largely due to the success of Bittensor (TAO), which gained 16.8% in the last week and briefly touched over $488 before falling back to its current value of around $429. The decentralized machine learning network added more than $600 million to its mcap over this period.
An assortment of other AI tokens also put on an impressive display. Some of this week’s best performers include:
- Zebec Network (ZBCN): gained 35.8%
- Forta (FORT): gained 65.3%
- Grass (GRASS): gained 17.8%
Overall, Story (IP) led the AI sector in sveen-day returns, gaining a whopping 114.3% and smashing through successive all-time highs. The newly launched KAITO (KAITO) token also gained 56.3%—despite significant selling pressure from airdrop recipients.
Unfortunately, not all AI tokens fared quite so well. As we previously touched on, roughly 60% of AI tokens are in the red, with several down over 15% apiece.
Some of the worst performers currently include:
- Venice Token (VVV): lost 32%
- Echelon Prime (PRIME): lost 23.3%
- NetMind Token (NMT): lost 20%
The AI Agent token subsector hasn’t held up quite so well. Nine of the top 10 largest AI agent tokens are in the red, with Freysa (FAI) being the only exception. Notable AI agent tokens this week include Tokenbot (CLANKER), which gained 134.5% on significant trading volume, and Dolos The Bully (BULLY) which lost 63.3%.
>> Keep tabs on your favorite AI Agent tokens here.
Source: DefiLlama
Compared to other sectors, the AI sector has performed particularly well over the last seven days. Per DefiLlama's narrative tracker, the sector saw an mcap-weighted gain of 9.1%, making it the third best-performing sector tracked by the platform—outperformed only by Bridge Governance tokens and Data Availability tokens.
AI News Roundup
Several major developments occurred in the AI space this week, some of which may impact how the sector evolves in the months and years to come.
Some of this week’s most significant stories include:
Kava Unveils World's Largest Decentralized AI Model: On Feb. 20, 2025, at Consensus Hong Kong, Kava introduced the world's largest decentralized AI model, powered by DeepSeek R1. This integration enables users to perform on-chain transactions and optimize DeFi strategies through natural-language commands, enhancing accessibility within the decentralized finance ecosystem.
Figure AI Unveils ‘Helix’ Vision-Language-Action (VLA) Model: Figure AI, a humanoid robot development firm, recently unveiled Helix, a Vision-Language-Action (VLA) model enabling humanoid robots to perform complex tasks through natural language commands. Helix controls the robot's entire upper body and facilitates multi-robot collaboration without task-specific programming. It operates on low-power embedded GPUs, making it suitable for immediate commercial deployment.
Elon Musk's xAI Launches Grok 3 AI Model: Elon Musk’s xAI has introduced Grok 3, claiming it outperforms GPT-4o and DeepSeek V3 in math, science, and coding benchmarks. The model is available to X Premium+ subscribers and through a standalone app, marking xAI's latest push in the competitive AI landscape. For now, the model is free to use.
DeepSeek to Open-Source AI Model Code: Chinese AI startup DeepSeek announced plans to release five code repositories related to its AI models, reinforcing its commitment to open-source development. This move aims to provide infrastructure support for existing publicly shared models and follows the recent release of their Native Sparse Attention algorithm, enhancing efficiency in long-context processing. (source)
Kaito AI Launches KAITO Token During Market Meltdown: Kaito AI, an AI-driven Web3 information platform, has launched its native token, KAITO, distributing 10% via an airdrop. Despite initial sell-offs by major influencers, the token's price surged approximately 50%, briefly touching about $2.00 and achieving a market capitalization of over $480 million.
>> That’s a wrap for this week’s AI update. Join us next Monday for more AI news, insights, and developments!
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