The market for AI-focused cryptocurrencies experienced a severe downturn, with major tokens like Bittensor (TAO), Near Protocol (NEAR), Internet Computer (ICP), and Render (RNDR) posting losses exceeding 20% over a weekly period. This sell-off was triggered by mounting investor concerns over massive capital expenditure plans from Big Tech giants like Alphabet and Amazon, with AI investments for 2026 estimated to potentially balloon up to $500 billion.
The combined market capitalization of all AI cryptocurrencies nosedived by over 40% on Friday, with the sector's total valuation falling to roughly $12 billion. Data shows the sell-off intensified, with the AI crypto market recording over 42% losses in the past 24 hours alone. Bittensor (TAO), the largest AI-focused token with a market cap of $1.58 billion, fell 23% over seven days to trade around $164. NEAR fell 25.4%, while ICP and RNDR posted similar weekly losses.
The core investor fear is that the astronomical costs of AI development will erode corporate margins before monetization is realized, a concern highlighted by recent earnings reports showing a significant gap between infrastructure spending and profit generation. This anxiety spilled over from traditional markets, triggering sell-offs in AI-linked software stocks like Microsoft (down over 8% in five days) and chipmakers AMD (down 18.5%) and Nvidia (down 10%). These firms provide the essential hardware and processing power that underpin the decentralized networks of many AI crypto projects.
Compounding the sector-specific pressure was a broader crypto market crash. Bitcoin's dramatic plunge below key support levels, briefly touching near $60K, triggered nearly $2.6 billion in liquidations across leveraged markets. This confluence of macroeconomic, geopolitical concerns, and the Bitcoin-driven liquidation event drove risk-on sentiment away from speculative assets like AI tokens.
Amidst this turmoil, the token AI (Sleepless AI) exhibited contrasting behavior, continuing a tight consolidation phase. Its price held between $0.020 and $0.028, trading near the upper boundary at $0.02690. While its 24-hour trading volume decreased by 40.79% to $3.89M, its market capitalization rose 3.77% to $13.13M, showing stability within its defined range despite the sector-wide collapse.
