AI sector plunges 22.3% in a week, continuing a four-month downtrend.
TL;DR…
- Market crash devastates AI tokens: AI sector plunges 22.3% in a week, continuing a four-month downtrend. Top AI tokens suffer heavy losses, with ARC down 64.2%.
- Extreme fear grips crypto markets: The CMC Crypto Fear & Greed Index hits all-time low of 17. Over $2.68 billion liquidated, marking a brutal week across assets.
- AI sector among worst performers: AI tokens saw a 14.6% weighted loss, ranking third-worst among 22 tracked sectors. Bitcoin and Ethereum fared better.
- Notable AI updates despite downturn: xAI predicted to lead AI models by March. YZi Labs invests in Tensorplex Labs. Check Point partners with Cardano for AI-driven security.
The word of the week is: “devastation.”
Cryptocurrencies across the board are experiencing nothing short of a cataclysmic drop. Bitcoin (BTC) almost touched $80K, and most altcoins crashed to their lowest values in months.
How did the AI sector hold up during this meltdown? Let’s take a look—but first, a broader update.
>> Did you miss last week’s AI update? Check it out here.
Market Overview
On March 6, 2025, President Donald Trump signed an executive order to create a Strategic Bitcoin Reserve.
According to the plan, the U.S. will audit its existing cryptocurrency holdings and move seized Bitcoin (BTC) into a strategic reserve aimed at holding the asset for the long term. He also called for the government to look into additional budget-neutral ways to acquire more BTC and grow its reserve.
Despite the historic announcement, the market seemingly reacted with distaste, since many were expecting the government to begin actively buying BTC immediately—despite this never being mentioned.
Source: Coinglass
This week has been one of the most dramatic on record for long liquidations, with more than $2.68 billion liquidated during this period.
This comes alongside the weakening of the U.S. stock market and Dollar Index (DXY), with S&P 500 futures down 2.5% in a week and DXY down to October 2024 levels.
The CMC Crypto Fear & Greed Index is now at the lowest recorded number since tracking began in June 2023.
Sitting at just 17, this indicates a prevailing sense of extreme fear in the market as speculators begin to wonder if the bull market ended prematurely.
AI Market Recap
If you thought it couldn’t get any worse for the AI sector… it just did.
Source: Top Big Data & AI Tokens Page
The last week was one of the most punishing on record for AI tokens, with the sector losing 22.3%.
The AI category has now been on a downtrend for four months and has retracted back to September 2024 levels.
The top 10 largest AI tokens by market capitalization are in the red this week, with most experiencing steep losses. Not only that, but almost every token in the top 100 is also down bad.
The worst performers among the top 100 include:
- AI Rig Complex (ARC): lost 64.2%
- Virtuals Protocol (VIRTUAL): lost 42.4%
- Qubic (QUBIC): lost 42%
- Solidus Ai Tech (AITECH): lost 38.1%
Just a single AI token in the top 100 managed to avoid the crash—AI Companions (AIC), with a 1.5% gain.
That said, some tokens did display relative strength in the down market. This week’s least affected AI tokens include:
- DeXe (DEXE): lost 5.8%
- OriginTrail (TRAC): lost 6.8%
- Aethir (ATH): lost 7.6%
- Basic Attention Token (BAT): lost 8%
The fact that the best-performing tokens are down a minimum of 5% is a testament to the strength of the recent crash.
The AI agent subsector doesn’t look so hot either.
Of the top 100 AI tokens, 98 are in the red this week, with GAME by Virtuals (GAME) and ai16z (AI16Z) hit the hardest with a 70.7% and 54.9% loss, respectively.
The last metric we'll cover today is the sector's relative strength.
Source: DefiLlama
According to DefiLlama’s narrative tracker, the AI sector was one of the worst-performing sectors this week, seeing a 14.6% market-weighted loss against other sectors. This makes it the third-worst-performing sector out of the 22 sectors tracked by the platform.
For comparison, the Centralized Exchange Token (CEX), Bitcoin, and Ethereum sectors were the best performers.
AI News Roundup
Alongside the bearish price action, there were also no major news stories this week. That said, the sector continues to perform in the background, with minor wins and progress noted.
Some of this week’s most significant relevant updates include:
Source: Polymarket
xAI To Boast World’s Best AI Model by EOM: According to current Polymarket predictions, Elon Musk's xAI is now expected to have the world's best AI model by the end of March 2025. For comparison, it is currently estimated that OpenAI will have the best model by the end of the year.
YZi Labs Invests in Tensorplex Labs To Advance Decentralized AI: YZi Labs has invested in Tensorplex Labs, a decentralized AI laboratory integrating blockchain technology with artificial intelligence. Tensorplex Labs focuses on developing applications and infrastructure to enhance AI development through decentralization. Their key projects include Tensorplex Dojo, a platform facilitating human-AI collaboration, and Backprop Finance, a decentralized finance hub within the Bittensor ecosystem.
Check Point and Cardano Collaborate on AI-Powered Blockchain Security: Check Point Software Technologies and Cardano have partnered to enhance blockchain security using artificial intelligence. Their collaboration integrates AI-driven threat detection and prevention systems into Cardano's infrastructure, aiming to safeguard against smart contract vulnerabilities, phishing attacks, and other cyber threats in real time.
>> That’s a wrap for this week’s AI recap. Here’s hoping we provide a more favorable update next week.
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