The AI cryptocurrency sector experienced one of its sharpest downturns in recent history, shedding $2.7 billion in market capitalization last week as Bitcoin fell to its lowest level since November 2024. According to market data, AI tokens declined 14.8% week-over-week and 14.5% month-over-month, mirroring broader weakness across digital asset markets. The CMC Crypto Fear and Greed Index plunged to 15, entering Extreme Fear territory and approaching its lowest reading since tracking began in June 2023.
The selloff affected most major AI crypto tokens, with 80% of the top 100 by market capitalization recording losses. Story (IP) suffered particularly severe damage, dropping 36.1% over the seven-day period, while numerous other prominent AI tokens contracted by more than 30% in the overall downturn.
AI Crypto Tokens Face Widespread Capitulation
The decline in AI cryptocurrency valuations came amid broader macroeconomic turbulence that saw precious metals experience record-breaking sell-offs and the U.S. dollar index break out from its downtrend. However, altcoins bore the brunt of the market correction, with many reaching multi-month lows across short- and medium-term timeframes.
Additionally, the AI sector underperformed several other digital asset categories when ranked by decline in fully diluted market capitalization, according to data from Artemis. Despite the widespread losses, a small number of tokens defied the downturn and posted impressive gains during the week.
Select Tokens Buck Downward Trend
Among the week’s standout performers were CLANKER, SENT, and FHE, which recorded gains while the broader AI crypto sector struggled. AI agent tokens featured heavily among the top performers, though the subsector as a whole underperformed the market average, according to the report.
Meanwhile, trending tokens outperformed the sector average, revealing renewed interest in AI large-cap cryptocurrencies despite the challenging market conditions. The catalysts behind some individual token gains remained partly unclear, the data indicates.
Infrastructure Development Continues Despite Market Weakness
In contrast to the price action, fundamental development in the AI crypto space advanced throughout the week. Ethereum’s new ERC-8004 standard launched on mainnet, introducing on-chain registries for agent identity, discovery, and portable reputation designed to enable autonomous services to transact across applications without centralized gatekeepers.
Furthermore, ChainGPT launched the public testnet for AIVM, its decentralized AI compute initiative, opening live usage and measurement for real workloads as the project moves toward a more composable compute marketplace for developers and agents. These developments suggest underlying infrastructure continues maturing regardless of short-term price volatility.
Bittensor and Commerce Templates Expand Ecosystem
Bittensor subnet teams continued shipping updates, with subnet economics increasingly resembling standalone AI businesses rather than pure infrastructure plays. Chutes (SN64) was highlighted in ecosystem updates as “AI commodity” specialization accelerates across the network.
Additionally, Pieverse released x402 commerce templates for agents, deploying ready-to-use marketplace implementations that enable agents to complete real purchases across multiple merchants using on-chain payments. The move represents another step toward native machine-to-machine commerce in cryptocurrency ecosystems.
Market participants will be monitoring whether AI crypto tokens can stabilize in the coming weeks or if further downside pressure persists. Authorities have not confirmed when broader market sentiment might shift from Extreme Fear to more neutral territory, leaving near-term price direction uncertain.
