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AI-focused crypto projects, which surged in late 2024, are experiencing steep declines as the market corrects.
Author: Sahil Thakur
AI-focused crypto projects, which surged in late 2024, are experiencing steep declines as the market corrects. Data shows that Virtuals Protocol (VIRTUAL) and ai16z (AI16Z) have suffered losses of over 80% YTD, with 40-50% drop in last 7d, with other AI agent-related tokens following suit.
Virtuals Protocol, which previously saw strong adoption in AI-powered metaverse applications, now trades at $0.64, down 83.69% this year. ai16z, a Solana-based AI-powered trading protocol, has also dropped significantly, losing 54.04% in the past 7 days, bringing its price down to $0.19.
Other AI agent projects, including AIXBT, Phala Network (PHA), and AI Rig Complex (ARC), are also down by over 70% in 2025, signaling a broader trend in the sector. The decline follows months of price appreciation fueled by AI hype and institutional interest in artificial intelligence-powered blockchain applications.
The AI crypto sector exploded in 2024 as investors poured funds into projects promising blockchain-based AI solutions. Virtuals Protocol and ai16z both saw rapid gains, with Virtuals previously trading above $5 and ai16z reaching an all-time high of $2.48 in early 2025. However, the current sell-off suggests a potential cooling-off period for the sector, possibly driven by profit-taking and reduced speculative interest.
Phala Network, which focuses on decentralized secure cloud computing, saw more modest growth compared to Virtuals and ai16z, yet it has still dropped 25.79% this week. Similarly, Aixbt by Virtuals (AIXBT), an AI-driven market intelligence token, is down 50.60% over the same period.
Despite the price crash, some industry leaders remain optimistic about AI agents in crypto. The Artificial Superintelligence Alliance (ASI)—a merger of Fetch.ai, SingularityNET, and Ocean Protocol—remains a key player in the space. ASI saw less severe price fluctuations than other AI tokens, indicating possible long-term stability.
AI Agents seem to have suffered the most simply due to the fact that they benefitted the most due to altcoin volatility.
The sharp decline in AI agent crypto projects highlights the risks of investing in high-volatility narratives. Many of these tokens saw exponential gains in late 2024, only to experience deep corrections in early 2025. If you’re holding or considering investing in AI-focused crypto assets, here’s what to keep in mind:
This price action serves as a reminder to approach hype-driven sectors with caution. AI in crypto remains a promising space, but distinguishing between long-term innovation and short-term speculation is key. Always do your own research (DYOR) and never invest more than you can afford to lose.
Even though communities of these projects still seemed to be pushing and supporting the projects, some disgruntled followers could be seen here and there.
Virtuals protocol’s buyback program was met with skepticism over the real intention. Freyas AI ‘s website also was called into question, apparently being unavailable for 4 days on a stretch.
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