AI agent sector suffers 44% market cap wipeout

The sector saw a $8.7 billion wipeout in market value

article-image

cybermagician/Shutterstock modified by Blockworks

share


This is a segment from the 0xResearch newsletter. To read full editions, subscribe.


If you count the launch of GOAT as the birthdate of the AI agent meta, then this subsector is about three months old. Over this short span, the AI agent market has ballooned to a $20 billion market cap with relatively few tier-1 CEX listings.

That’s nuts, especially since AI agents are still predicated on promised — rather than current — utility.

It’s perhaps unsurprising then that the agent market corrected sharply over the weekend, showing a 43.5% drawdown to $11.3 billion since its Jan. 6 top.

Source: cookie.fun

The top AI agent tokens haven’t been spared the guillotine. In the last seven days, the largest three AI agent tokens by marketcap — VIRTUAL, AI16Z and FARTCOIN, are down 46%, 52%, and 42%, respectively.

AIXBT, the fifth-largest agent token, showed the greatest resilience, with a drawdown of 28%.

It’s a bloodbath. So what? Expect agents to continue dominating 2025.

Crypto’s obsession with AI is undeniable at this point. It’s riding the hottest tech sector of the decade and still dominates Twitter sentiment among rabid casino speculators. 

Source: Kaito

The billion dollar question then is: How high can the AI agent market go?

At $11.3 billion, AI agent tokens make up about 0.34% of the total crypto market cap today.

If we assume a 40% growth of the total crypto market cap to $5 trillion, and AI coins take a 5% slice of that pie (DeFi dominance peaked at 7.69% in 2022), then you can expect $250 billion as a bull case, says kel.xyz.

Less bullish estimates by David Nage of Arca fund projects a range of $93 billion to $170 billion.

With this framework in mind, the “safe” bet is to hold the ecosystem majors of the AI meta: VIRTUAL, AI16Z and ZEREBRO… right?

The problem is these inter-narratives rotate faster than anyone can keep up with. There’s hardly any guarantee that the “blue chip” agent coins today maintain their dominance over months, or even weeks from now.

In the span of a year, the story of “why AI crypto” went from a beta play on Nvidia and OpenAI to AI memecoins, to AI agents, to AI agent frameworks, AI investment DAOs and AI agent swarms.

As of last week, the most recent chapter in this tale is “DeFAI,” i.e., DeFi + AI. I interpret this as an insistence that “AI has real utility, look to its DeFi use cases!”

I’m reminded of a tweet from Daily Ape’s founder Darren Lau. If you’d made the bold bet that AI would sweep crypto markets and scoop up a bag of major AI tokens like TAO, RNDR and AKASH in early 2024, you’d still be sitting on a loss year to date.

Loading Tweet..

Winning at the AI agent meta then requires one to pick the right players in an ever-changing playbook of questionable utility. Is it any wonder crypto traders get rekt?


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

The goal, per Santiago Santos, is to make crypto a relatable piece of tech for people who may not even understand it

article-image

Stripe stablecoin unit aims to operate under a federal charter enabling regulated stablecoin issuance and custody services

by Blockworks /
article-image

Will TradFi make crypto better or create more problems than it solves?

article-image

Subtle decisions by risk curators saved Aave from significant turmoil

article-image

The new Rootstock Institutional unit aims to connect professional investors to Bitcoin-native yield and liquidity strategies anchored in BTC’s security layer

by Blockworks /
article-image

DOJ files record civil forfeiture against more than 127,000 BTC linked to scam activity

by Blockworks /