AI Tokens Plunge: Why Are Investors Alarmed?

The rapid rise of crypto backed by artificial intelligence in 2024 suggested a decisive turning point for the convergence between blockchain and AI. Driven by market euphoria and enthusiasm for agentic AIs, these assets attracted massive capital inflows, propelling their valuation to unprecedented heights. However, the enthusiasm evaporated as quickly as it appeared: within a few months, some of these tokens lost up to 90 % of their value. This collapse raises critical questions about the viability of these projects and the solidity of the market. Are investors facing a simple correction after a speculative surge, or are we witnessing the beginnings of a lasting disinterest ?

AI Tokens Adrift: A Market in Complete Disarray

This dizzying fall of AI tokens took many investors by surprise, given the abruptness of the decline. According to CoinGecko data, AI Rig Complex (ARC), ElizaOS (AI16Z), and Virtuals (VIRTUAL) have seen their market capitalization shrink by 75 % to 90 % since January. Even Fartcoin, a meme coin AI that captured attention in 2024, plunged by 65 % in 30 days and is now worth only $430 million.

This bearish movement is part of a broader context of contraction in the crypto market, which has lost 16 % of its value since the beginning of the year. “Look at the charts of AI16Z, ARC, and even Fartcoin; it’s clear that the trend is downward, and many believe these tokens will never regain their past levels,” points out trader Elon Money in a post on February 6, 2025, on the X platform (formerly Twitter). This disillusionment highlights how emerging markets are subject to cycles of exuberance and correction, especially when speculative interest outweighs technological fundamentals.

A Hard Hit Due to a Liquidity Shift ?

Beyond simple market fluctuations, the drop in AI tokens seems to have been amplified by a major exogenous event: the launch of the TRUMP meme coin in January. This token, tied to the image of Donald Trump, captured $80 billion in market capitalization in just 24 hours. Such an influx drained liquidity available for other emerging assets. “The reason for this brutal liquidation is clear: liquidity is leaving the AI token market to go elsewhere,” highlights Crypto Stream in a post on January 31, 2025, on social network X.

Meanwhile, political uncertainty has intensified investor distrust. Recent statements by Donald Trump, who threatens to impose 25 % tariffs on Canada and Mexico, have sparked widespread panic in financial markets. In this climate, the most speculative cryptos were the first to feel selling pressure. Major altcoins held up relatively well, but small emerging projects, like AI tokens, were “literally massacred,” according to Crypto Stream.

Contrasting Prospects for the Future of AI Tokens

While the current correction appears severe, some experts believe these assets could rebound in the long term. “When you look at frameworks like ElizaOS and Rig, you see strong teams, high-level partnerships, and integrations with major blockchains,” states Elon Money. The growing utility of agentic AIs, these autonomous intelligences that interact with blockchains, suggests a future where these technologies will play a central role in the digital economy.

According to VanEck, the number of active autonomous AIs on blockchains could exceed 1 million by the end of this year, strengthening their impact on the crypto ecosystem. However, these projects must first convince investors of their viability and ability to generate value beyond speculation.

The Implosion of AI Tokens marks a critical point for this new class of assets. Some will see it as a necessary purge to cleanse a still immature market, while others will see it as a sign of enthusiasm that was too premature. In any case, their future will depend on their ability to offer concrete uses and prove they are not just a fleeting trend.