Sector loses $4B in mcap amid market downturn; many top 100 tokens post double-digit losses.
TL;DR…
- AI tokens hit hard: Sector loses $4B in mcap amid market downturn; many top 100 tokens post double-digit losses.
- Bitcoin dominance grows: BTC dips 6% but outperforms ETH and altcoins as fear index drops to 24.
- GPT-4o sparks art trend: Studio Ghibli-style AI images go viral, raising ethical questions on artistic replication.
- xAI acquires X: Elon Musk's firm buys X in a $33B deal to merge AI capabilities with social media.
Since the start of 2024, the cryptocurrency industry has arguably had more positive developments than the 10 years before it—with the approval of Bitcoin spot ETFs in the U.S., the installation of a pro-crypto U.S. President, and the upcoming U.S. Strategic Bitcoin Reserve.
Despite this progress, the market has been leaning bearish for the last three months. Altcoins, in particular, were hit hard, leaving many perplexed.
The bearish momentum continued this week, with most AI tokens suffering a crushing decline. Here’s how the sector evolved.
>> Did you miss last week’s update? Check it out here.
Market Overview
Source: Bitcoin (BTC) Coin Page
Bitcoin (BTC) fell to as low as ~$81,300 on some exchanges and is now hovering around $82,200—down 6% for the week.
Ethereum (ETH) was hit harder still, falling to its lowest value since October 2023. It’s currently trading at ~$1,800 following a 13.3% weekly decline.
During this time, Bitcoin’s market dominance has increased to 61.4%, its highest value in more than four years, as altcoins show weakness against the OG cryptocurrency.
The market is likely reacting in anticipation of the April 2 implementation date, which will affect various industries and countries.
Some believe the tariffs will increase inflation, leading to extended quantitative tightening (QT) and potentially delaying the rate cuts that could allow liquidity to flow back into risk-on assets.
Source: CMC Crypto Fear and Greed Index
After briefly recovering last week, the CMC Crypto Fear and Greed Index is now back at 24, indicating significant fear in the market.
AI Market Recap
Following last week’s brief rebound, the AI sector is once again steeped in red, with the vast majority of AI tokens retracing their recent gains and then some.
Source: Top Big Data & AI Tokens Page
In the last week, the sector has shed almost $4 billion from its market capitalization (mcap), falling by 13.2% to reach its current mcap of $25.5 billion.
As you might expect, almost all of the top 100 AI tokens by market capitalization are in the red over the last seven days, with some suffering declines of more than 20%.
Some of this week’s worst-performing AI tokens currently include:
- Nillion (NIL): lost 46.4%
- AI Rig Complex (ARC): lost 35.4%
- TARS AI (TAI): lost 31.7%
- Virtuals Protocol (VIRTUAL): lost 29%
Just 5% of the top 100 AI tokens managed to resist the downtrend and stay positive over this period.
Source: Top Big Data & AI Tokens Page
The most resilient tokens over the last week include:
- VIDT DAO (VIDT): gained 54.1%
- Grass (GRASS): gained 9.6%
- Beldex (BDX): gained 4.5%
- DeXE (DEXE): gained 1.1%
Notably, rumors claiming that Grass is now generating mid-8-figure revenue from user data sales have bolstered confidence in the project.
The AI agent subsector didn’t manage to buck the trend, with more than 85% of the top 100 largest AI agent tokens in the red this week.
BOTIFY (BOTIFY) is currently the only top 100 AI token with a significant gain this week, rallying 98.5% in the last seven days.
Source: DefiLlama
When it comes to market cap-weighted performance, the AI sector is performing poorly compared to other sectors.
With an mcap-weighted decline of 14.2% in the last week, the AI sector ranks 19th of the 22 sectors tracked by the platform.
For comparison, Bitcoin held up better than the rest with a 5.9% decline, whereas Analytics tokens were hit hardest with a 16.5% mcap-weighted decline.
AI News Roundup
Despite the lackluster price performance of AI tokens, the AI sector has continued to make significant progress in the last week.
Some of the most significant recent stories include:
Mira Network Launches Public Testnet: Mira Network, a decentralized AI verification platform, has launched its public testnet, enabling developers and users to explore its blockchain-based verification system. The network already boasts 2.5 million users and processes 2 billion tokens daily. That said, a large fraction of these are likely sybils farming the upcoming airdrop.
OpenAI's GPT-4o Spurs Studio Ghibli-Style Image Trend: OpenAI's updated GPT-4o model introduces advanced image generation capabilities, enabling users to create photorealistic images and transform photos into various artistic styles. This has led to a viral trend of producing Studio Ghibli-inspired images, sparking both enthusiasm and ethical debates regarding AI's role in replicating distinctive art styles.
Elon Musk's xAI Acquires Social Media Platform X for $33 Billion: Elon Musk's artificial intelligence company, xAI, has acquired the social media platform X (formerly Twitter) in an all-stock deal valued at $33 billion, including $12 billion in debt. This strategic move aims to integrate xAI's advanced AI capabilities with X's extensive user base, enhancing both platforms' functionalities.
Vitalik Buterin's Awkward Interaction: Earlier this week, Ethereum co-founder Vitalik Buterin was spotted interacting with a Boston Dynamics Spot Robot. The short clip features Buterin on his knees, meowing at the dog-shaped “Spot” robot, after which the robot walks away. The clip garnered thousands of views across X and sparked criticism from the Ethereum community.
Pluralis Research Secures $7.6M To Advance Decentralized AI Development: Pluralis Research, an AI startup, has raised $7.6 million in seed funding led by CoinFund and Union Square Ventures. The company is developing "Protocol Learning," a decentralized approach to AI model training that enables collaborative development without centralized control.
>> That’s a wrap for this week’s update. Check in next week for more AI insights and developments.
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