AI agent tokens drop 50% in weeks as traders hunt for ‘growth phase’

The excitement that once fuelled AI agents, a buzzy corner of the crypto market, seems to have fizzled.

The sector has lost almost half of its market value since peaking at $10 billion earlier in the year.

Also, 90% of the cryptocurrencies associated with AI agent projects, which are computer programmes that hoover up data and perform tasks, have plummeted to nearly zero, with little or no trading activity.

AI agent crypto projects aim to create systems that can analyse the cryptocurrency market without the need for human intervention. They claim to leverage AI technology to study market trends, perform trades, or even invest in cryptocurrency projects, all done autonomously.

Better decisions

Proponents say AI agents can replace humans in managing crypto projects and even make better decisions and greater profits.

But memecoins have been the most popular adoption vehicle for AI agents.

In October, an AI agent called Terminal of Truths became popular on social media and was linked to the creation of a viral memecoin Goatseus Maximus, or GOAT for short. GOAT wasn’t created by Terminal of Truths but by an anonymous dev who only tagged the AI agent in a social media post.

And like memecoins, AI agent memecoins have plunged in value this year. Goat is down 91% from its $1.2 billion market value peak.

Still, market observers haven’t dismissed the sector’s potential but fault the initial enthusiasm for social and meme-based AI projects as the reason for the decline.

Tom Ngo, executive lead at layer 2 blockchain Metis, said crypto’s tendency to overshoot when a new technology emerges meant heavy losses for AI agent investors haven’t come as a surprise to market analysts.

According to Gracy Chen, CEO of crypto exchange Bitget, the lack of practical, real-world applications for these AI agent token startups has also contributed to their demise.

But Chen predicts the sector will grow to reach at least $50 billion this year.

“The AI token sector has yet to enter its growth phase,” Chen said.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.