AI agent tokens reel from a steep market correction

Over the past week, the AI agent token market has experienced a notable decline, while the largest cryptocurrency, bitcoin, has continued to trade sideways.

The native token of ai16z, which supports a DAO-run venture fund and the Eliza OS agent framework, saw its price halve over the last week — from $2.26 to $1.1 now — bringing its market valuation down to $1.1 billion. The token also declined by 10% over the last 24 hours.

Similarly, the token of Virtuals protocol, which allows users to create decentralized AI-driven digital assistants, fell 11% on the last day to $2.6 at the time of writing. Over the past week, it dropped 48% from a high of over $5, adjusting its market capitalization to about $2.6 billion.

Furthermore, the Swarms framework token experienced a sharp decline of over 55% this week — descending from just over $0.5 to $0.20. This adjustment places its market value at $200 million.

Even niche projects like the AI-based meme project Goatseus maximus (GOAT) weren’t spared, and its price decreased 40%, from $0.5 to $0.33 over the past week, according to The Block's price page .

This starkly contrasts with bitcoin’s performance, which has remained relatively stable over the past week at around $95,000.

AI agent tokens emerged on the crypto scene after integrating large language models like Truth Terminal, allowing tokens to engage actively with their followers.

Developed by researcher Andy Ayrey in March 2024, it gained attention for its witty responses on X and was integrated with a crypto wallet. Later, one of Truth Terminal’s responses inspired someone to create the GOAT meme coin, and thousands of other AI-themed tokens have since been developed using various frameworks. 

The proliferation of AI agent tokens pushed their aggregate market cap to over $15 billion in early January. However, the market has since fallen back to $12.55 billion.

The latest pullback in the prices of AI agent tokens marks a correction amid market volatility and the need to distinguish between memecoins being promoted as AI projects and truly autonomous agent software.

Recently, Dragonfly Managing Partner Haseeb Qureshi predicted that the AI agent craze would dominate this year as it’s the most social, but the novelty would eventually wear off. Qureshi said these are not agents; they are more like chatbots with memecoins attached, and they are barely agentic besides posting on X.