If the current market situation could be described in a single word, it would be “meltdown.”
TL;DR…
- Market Crash and Catastrophic Losses: The Cryptocurrency market saw massive losses; AI tokens were hit particularly hard.
- Historic Downturn: 24-hour liquidations exceed those of past financial crises, exacerbated by new U.S. tariffs and excessive market leverage.
- AI Tokens Down Across the Board: AI tokens crashed back to November 2024 levels, with only a few showing gains (e.g. DEXE); overall AI market capitalization severely diminished.
- Regulatory and Development Updates: OpenAI released powerful new AI tools; the EU is now enforcing strict AI Act penalties; ai16z rebranded to ElizaOS.
If the current market situation could be described in a single word, it would be “meltdown.”
Practically every cryptocurrency across the top 100 by market capitalization has seen shattering losses over the last week.
Unfortunately, the AI sector was also hit hard. Let’s dive in and see what’s what.
>> Did you miss last week’s AI update? Check it out here.
Market Overview
According to an estimate by Bybit co-founder Ben Zhou, up to $10 billion was wiped out over the last 24 hours alone. To put this into perspective, this is worse than the 24-hour liquidations seen during the COVID and FTX crashes combined.
These losses are primarily concentrated among altcoins, which have been—quite frankly—decimated. Ethereum (ETH) alone dropped by 18.3%, whereas other altcoins dropped by an average of 20.4% over the last week.
Meanwhile, Bitcoin (BTC) is hovering around the $95,000 price point after losing 5.7% in the last seven days. Its market dominance has swelled to 60.7%—its highest value since March 2021.
The reasons behind the sharp drop are multiple but appear to be related to new tariffs the U.S. levied against Canada and Mexico, alongside an excess of leverage in crypto markets.
AI Market Recap
As we previously mentioned, the market is not looking too hot.
The CMC Crypto Fear and Greed Index is back in the “fear” category, for the first time since October 2024.
The AI token sector has been devastated by shattering losses across the board. Only three of the top 100 largest AI tokens by market capitalization (mcap) are in the green this week.
In a show of strength, DeXe (DEXE) gained 7.1% over the last week, whereas AI Companions (AIC) gained a staggering 194.9% over the same period.
With that said, it’s time to examine the damage.
Source: Top AI & Big Data Tokens Page
More than $10 billion has been wiped off the AI token market cap as the sector lost 24.5% over the last week. The sector has now fallen back to levels not seen since November 2024.
As you might expect, dozens of AI tokens have lost more than 25% over this period. Some of this week’s worst performers include:
- Venice Token (VVV): lost 78%
- io.net (IO): lost 46.3%
- AIOZ Network (AIOZ): lost 40.4%
- Cookie DAO (COOKIE): lost 38.8%
Unfortunately, it remains unclear if the bottom is in. As I write this, many AI tokens continue sliding further into the red.
The AI Agent subsector hasn't escaped unscathed either. More than 90% of AI Agent tokens are in the red over the last seven days, with GRIFFAIN (GRIFFAIN) and Zerebro (ZEROBRO) among those impacted worst—down 58.9% and 47.3% respectively.
Though Fartcoin (FARTCOIN) is up 9% over the last 24 hours, it is still down 35.9% over the last seven days.
Overall, many AI tokens have now retraced several months of upward momentum and are trading at levels not seen for over a year in many cases.
It remains to be seen if this is an excellent opportunity to scoop up discounted alts or if a further breakdown of the altcoin market is in the cards.
>> Click here to keep tabs on your favorite AI tokens.
AI News Roundup
Though AI tokens experienced their worst week ever in terms of price action, significant AI developments continue to take place behind the scenes.
Some of this week’s most pertinent stories include:
OpenAI Releases Deep Research Agent and o3-Mini Model: OpenAI has released two new tools: the Deep Research Agent, aimed at advancing artificial general intelligence safely and carrying out human-level online research tasks, and the o3-mini model, optimized for high performance in STEM fields with enhanced reasoning capabilities and efficiency. These tools are designed to push the boundaries of AI research and application. (Source 1) (Source 2)
Ai16z Rebrands to ElizaOS: The decentralized autonomous organization (DAO) previously known as ai16z has been renamed ElizaOS. This change aims to avoid confusion with the venture capital firm Andreessen Horowitz, abbreviated as A16z. The rebranding includes maintaining the AI16z ticker symbol for the immediate future, with further updates pending DAO approval.
EU's AI Act Enters Enforcement With Strict Penalties: The European Union has begun enforcing its AI Act, which imposes strict regulations and severe penalties for non-compliance. Companies now face fines of up to €35 million ($36 million) or 7% of global revenues for violations involving high-risk AI applications, such as social scoring and real-time facial recognition.
Perplexity Teases Future Crypto Integration: Perplexity AI's CEO hinted at upcoming cryptocurrency integration, which will enhance its platform's capabilities. Details on the implementation of specific features like crypto payments for Pro users or AI-powered investment tools remain unspecified.
>> That’s all for this week’s AI recap. Join us next week for more crypto AI news, developments, and analyses.
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