The temporary break of Bitcoin beneath $99,000 led to an extensive market adjustment, during which both DeFAI and AI agent tokens suffered sharp price drops.
The sections that produced robust annual-end performance during 2024 slowed radically throughout January 2025. Selling pressure collapsed the promise of DeFAI and AI agents as growth stories, eliminating substantial value.
The DeFAI sector suffers heavy losses
The DeFAI sector, which contains emerging tokens, experienced a major market capitalization decrease within 24 hours. Within 24 hours, the sector experienced its largest drop yet, as major tokens AIXBT and GRIFFAIN caused more than 21% depreciation, leading to a $2.1 billion market value. Market assets in the sector experienced a broader decline exceeding 29% because owners intensified sales activity.
AI agents on Ethereum, Solana, and Base were mostly in the red. | Source: Bubblescanner
The DeFAI market segment continues to show modest market value alongside DeSCI, yet it displays extreme price swings and sudden market adjustments. The declining performance of key AI agent projects has primarily resulted in the sector’s failure. Decreasing interest in the space sector is driving additional losses throughout lower-valuing assets.
AI agent tokens under pressure
The broader AI agent market lost significant value between November 2022 and late January as its valuation decreased from $17 billion to $9.59 billion. Ethereum- Solana-based and Base-based tokens suffered in the declining market and had trouble retaining prior investment streams. They led the entire market by holding the top token position and fell by 50% until it reached $0.50 from $1 in price value. During this time, GRIFFAIN declined from $0.60 to $0.30 as other tokens wiped out 20% to 40% of their value.
Top AI agents saw a slower turnover as funds flowed into other assets, moving into cbBTC and Base meme tokens. | Source: Alphanomics
FARTCOIN maintained its downslide by delivering a decline of 25.9% across 24 hours, which resulted in its trading value reaching $0.94. The price of FARTCOIN declined after news surfaced that Truth Terminal’s operator truth terminal used OTC deals to sell its holdings.
New competitors disrupt the AI market
DeepSeek’s recent release as a newly trained AI model has transformed the current AI agent market. Projects developed using older models now find themselves in a race to adjust their operations. SwarmNode and Solan have launched DeepSeek-based tools that take advantage of this market change while Internet Computer implements new AI personalities that integrate with the DeepSeek ecosystem.
Money from declined AI asset investments now flows into safer options like infrastructure tokens and Coinbase’s cbBTC blockchain assets. Meme tokens and DeFi assets, including Aerodrome AERO, have recently received increased investor interest. The level of resistance of AI technology requires demonstration after short-lived excitement waves.