AI Tokens Plummet 90%: Can Agentic AIs Recover?

Artificial Intelligence (AI) tokens, which had surged in the fourth quarter of 2024, have since experienced a significant downturn. According to data from CoinGecko, these tokens have plummeted by as much as 90% from their 2024 highs. Top agentic AI platforms, including AI Rig Complex (ARC), ElizaOS (AI16Z), and Virtuals (VIRTUAL), have shed between 75% and 90% of their market capitalization since January.

The crypto market's drawdown, which began in January, has seen the total crypto market cap decline by nearly 16%. This downturn has affected AI agent tokens disproportionately, with many traders believing these tokens may not recover to previous levels. Fartcoin, an AI-related memecoin, has dropped by around 65% in the past 30 days, with its market cap falling to approximately $430 million as of February 6. Overall, AI agent tokens are cumulatively down by more than 40% to around $6 billion from highs of over $10 billion.

The launch of Trump's Official TRUMP (TRUMP) memecoin on January 18 is believed to have sucked liquidity and attention away from other new tokens, including memecoins and AI agent tokens. This narrative-wide shift in liquidity is thought to be a significant factor in the sharp sell-off of AI tokens. Additionally, marketwide panic caused by US President Donald Trump's threat to levy 25% tariffs on Canada and Mexico further exacerbated the situation, with tokens tied to small, emerging projects taking an especially hard hit.

Despite the recent downturn, traders remain optimistic about the longer-term potential of AI tokens. Agentic AIs, which pursue complex goals autonomously, are reshaping the digital economy by contributing to Web3 applications, launching tokens, and interacting with humans autonomously. Asset manager VanEck expects upward of 1 million AI agents to populate blockchain networks by the end of 2025. Strong teams, multiple high-profile partnerships, and integrations with major projects and blockchains make AI tokens like ElizaOS and Rig promising investments for the future.