AI tokens market cap drops 28% to $50.5B from $70B peak

The market capitalisation of AI cryptocurrencies has dropped by 28%, falling from $70.4 billion on December 7 to $50.5 billion as of 7:15 a.m. UTC.

This decline marks a near one-third reduction in the total value of AI-based digital assets.

In addition to the market cap decrease, the cumulative trading volume of AI tokens has also fallen, dropping nearly 11% in the past month to $4.73 billion.

This suggests a decline in trader interest in AI cryptocurrencies.

The drop in AI token values occurred amid a broader downturn in the cryptocurrency market.

Bitcoin (CRYPTO:BTC) experienced a significant correction of over 14%, from its all-time high of above $108,000 on December 17.

This downtrend has had a cascading effect on other cryptocurrencies, including AI tokens.

Despite the recent decline, many analysts remain optimistic about the potential for a recovery in 2025.

They anticipate an incoming altcoin season, which could help boost smaller cryptocurrencies like AI tokens.

During altcoin season, Bitcoin’s market dominance tends to decrease, with profits flowing into altcoins.

The altcoin season in 2025 may begin in the first quarter, based on fractal patterns observed by technical traders.

Popular crypto trader Elja, in a December 27 post, mentioned that there are “a few more weeks before mega altseason” begins.

If the altcoin season occurs as expected, Ether (CRYPTO:ETH) may also see a surge in value.

Some analysts predict that Ether could reach as high as $5,000 in the short term, with others expecting it to potentially surge to $15,000 by the end of 2025.