The AI token sector saw continued growth, fueled by a rebounding altcoin market and a weakening Bitcoin (BTC).
TL;DR…
- Crypto market rebounds despite weak CPI data: Altcoin market strengthens while Bitcoin dominance drops to 59.7%. The CMC Altcoin Season Index climbs to 40, hinting at growing altcoin momentum.
- AI token sector gains 4.4%, but mixed performance: Near Protocol (NEAR) and Injective (INJ) lead with 4.8% and 9.8% gains, while Bittensor (TAO) and DeXe (DEXE) struggle with losses. AI sector ranks 15th out of 22 tracked sectors by mcap returns.
- AI Agent subsector recovers but remains weak: Virtuals Protocol (VIRTUAL) gains 2.3%, ai16z (AI16Z) drops 6.9%.
- Big AI news: Bittensor launches dTAO upgrade; OpenAI plans GPT-5; and Elon Musk unveils Grok 3, calling it the "smartest AI on Earth."
Despite last week’s worse-than-expected CPI numbers, the cryptocurrency market is showing renewed signs of life.
The AI token sector saw continued growth, fueled by a rebounding altcoin market and a weakening Bitcoin (BTC). The CMC Altcoin Season Index improved to 40, up from 34 last week, indicating growing strength.
Here, we take a look at how the cryptocurrency market evolved over the last week.
Market Overview
The past week was a continuation of the recent volatility seen across the cryptocurrency market.
Source: Bitcoin (BTC) Coin Page
Bitcoin (BTC) has fluctuated between highs of over $98,400 and lows of under $94,900, settling at around $96,800 as of writing, down 1.2% for the week.
This slight weakness in the BTC market precipitated a reduction in market dominance. Bitcoin’s dominance score now sits at 59.7%—down from a 2025 high of 60.7% seen last week.
The CMC Crypto Fear & Greed Index still indicates slight fear in the market, despite murmurings on social media about a potential altcoin season if the trend continues in the current direction.
AI Sector Recap
This week was a mixed bag for the AI sector. While many AI tokens have demonstrated impressive strength, others were hit hard.
>> Did you miss last week’s AI recap? Click here to check it out.
Overall, the AI sector gained 4.4% over the last week to reach a $35.5 billion market cap.
Of the top 10 largest AI tokens by market capitalization (mcap), eight are trading in the green. Bittensor (TAO) and DeXe (DEXE) are currently the only stragglers among the top 10, recording a 5.1% and 8.3% loss respectively in the last week.
Source: Near Protocol (NEAR) Token Page
Meanwhile, Near Protocol (NEAR) and Injective (INJ) are leading the top 10 by growth, achieving a 4.8% and 9.8% gain respectively.
Near Protocol’s rally may be partly explained by a recent livestreaming blunder (or planned stunt?) involving topless photos.
Outside of the top 10, some of the smaller AI tokens have put on quite the performance. This week’s best-performing tokens currently include:
- Zebec Network (ZBCN): gained 41.9%
- Golem (GLM): gained 29.4%
- Victoria VR (VR): gained 23.7%
- yesnoerror (YNE): gained 23.3%
But as we touched on earlier, many AI tokens took a beating this week. Some of the worst performers currently include:
- Story (IP): lost 35.3%
- Venice Token (VVV): lost 21.4%
- AI Companions (AIC): lost 16.7%
- Echelon Prime (PRIME): lost 6%
Source: Top AI Agent Tokens Page
The AI Agent subsector managed to regain some momentum, but nothing reminiscent of the meteoric growth seen in 2024. Some of the most notable changes include Virtuals Protocol (VIRTUAL), which gained 2.3%, and ai16z (AI16Z), which lost 6.9%.
>> Click here to keep tabs on your favorite AI Agent tokens.
Despite the positive momentum this week, the AI sector is one of the worst-performing sectors by mcap-weighted returns. Per DefiLlama's narrative tracker, the AI sector ranked 15th of the 22 sectors tracked by the platform, with a mcap-weighted gain of 1.94%
For comparison, the best-performing sector was Liquid Staking Governance Tokens, which had a mcap-weighted performance of 14.4%.
AI News Roundup
This week saw an array of significant developments in the AI space, boding well for the sector’s future.
Below, we’ve rounded up some of the most important stories to bring you up to speed.
Bittensor Launches Dynamic TAO (dTAO) Upgrade: On Feb. 13, 2025, Bittensor introduced dTAO, shifting from centralized token issuance to a market-driven model. Each AI subnet now has its own token, with issuance rates dynamically adjusting to market demand. The new market-driven tokenomics is expected to help discourage low-quality subnets and eliminate the prevalent "weight copying" issue.
OpenAI Announces GPT-5 Release Timeline: OpenAI CEO Sam Altman has unveiled plans to release GPT-4.5, codenamed "Orion," in the coming weeks, followed by GPT-5 in the next few months. GPT-5 will integrate various technologies, including o3, aiming to simplify OpenAI's product offerings. In other news, the OpenAI Board unanimously agreed to decline Elon Musk's $97.4 billion takeover bid.
Elon Musk Unveils Grok 3, 'Smartest AI on Earth’: Elon Musk's xAI is launching Grok 3 today, calling it the "smartest AI on Earth." The chatbot boasts enhanced reasoning and reduced error rates, aiming to surpass competitors like ChatGPT. Musk claims it outperforms all AI chatbots and marks a leap in AI capabilities.
>> That’s all we’ve got for this week’s recap. Join us next week for more AI news, developments, and insights.
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