- The market capitalization of AI cryptocurrencies fell 13% to $6.42 billion, with tokens such as FARTCOIN and VIRTUAL losing more than 40% this week.
- User engagement fell 60%, as AI crypto tokens struggle to compete with centralized platforms such as DeepSeek AI.
AI-focused cryptoprojects have suffered a sharp decline, with the sector’s market value falling 13% in 24 hours to $6.42 billion. Major tokens such as FARTCOIN, AI16Z and VIRTUAL fell between 40% and 61% this week, reflecting the loss of investor confidence.
The drop follows months of poor adoption and lower participation on the platform, with active users down 60% since January.
The correction accelerated following the launch of DeepSeek AI, a competing non-crypto AI platform, which diverted attention away from blockchain-based alternatives. VIRTUAL, once the industry leader with a valuation of $4.6 billion in January, now has $811 million.
Only five artificial intelligence cryptoprojects exceed $300 million in market capitalization, while 15 remain above $100 million, a stark contrast to previous bullish forecasts.
Solana’s AI ecosystem retains the largest share with $3.2 billion despite a daily loss of 18.6%. Base Chain follows with $2.5 billion, driven by tokens such as TOSHI and AIXBT. Ethereum, however, does not have an appreciable presence in the sector. The combined valuations of other blockchains amount to $1.33 billion, underscoring the fragility of the niche.
Growth metrics point to broader struggles. The number of AI crypto-agents grew 11% between Jan. 7 and Jan. 24, from 1,250 to 1,387. Since then, only 13 new agents have been added. Since then, only 13 new agents have been launched, indicating a stagnation of developer interest.
User engagement reflects this trend: active accounts interacting with AI agents dropped from 19,069 to 7,541, down 60%.
ETHNews analysts attribute this drop to two factors. First, investors are exiting positions amid a broader cryptocurrency market correction. Second, AI cryptocurrencies are facing competition from centralized AI platforms such as DeepSeek, which offer faster processing without the technical limitations of blockchain.
The industry’s decline contrasts with earlier optimism. In late 2024, AI cryptoprojects attracted speculative capital due to the buzz around decentralized machine learning. However, limited real-world use cases and high transaction costs have eroded that momentum
ETHNewsmarket watchers point to potential silver linings. Solana’s continued dominance suggests some institutional commitment, while Base Chain’s growth points to niche opportunities. However, without tangible utility or user growth, the sector risks contracting further.
