AI tokens slump as October kicks off with market-wide crypto selloff.
TL;DR…
- Uptober turns south: Bitcoin drops 3%, escalating the Middle East tensions leading to a broad crypto sell-off.
- AI tokens slump: The top 20 AI tokens are down with Render (RNDR) leading losses with -14.5%.
- Bittensor shows resilience: DIA bucks the trend and grows 13% while the average altcoin loses 6.1%
- Future optimism: Grayscale highlights Bittensor potential; CZ and Harris support AI growth.
Despite a better-than-expected September, October has started off badly — with Bitcoin (BTC) already down 3% for the month.
Now, AI tokens are taking a worse beating than most as the market recoils due to the rising tension in the Middle East.
Let’s take a look at the current state of play in the decentralized AI space.
Did you miss last week’s update? Check it out here.
Uptober Starts Poorly
Due to escalating political tension in the Middle East, the market was spooked into a broad sell-off. Practically, every crypto in the top 100 is in the red in the last 24 hours, and AI tokens are no exception.
Keep tabs on your favorite AI tokens — click here!
All of the top 20 largest AI tokens are down in the last 24 hours, with Render (RNDR), The Graph (GRT) and Artificial Super Intelligence (FET) suffering the most, with a 14.5%, 12.1% and 11.2% loss respectively.
Source: CoinMarketCap AI & Big Data Token Page
A handful of tokens are showing remarkable resilience in this down market. These include the likes of Bittensor (TAO) which lost just 6.1% whereas DIA managed to buck the trend completely and rack up 13% growth.
To put this into perspective, the average cryptocurrency lost 6.2% in the last 24 hours. Overall, AI tokens are performing worse than the market average.
Despite once again choppy market conditions, there are reasons to be bullish for the weeks and months ahead.
According to a recent research report by Grayscale, several cryptocurrencies have high potential in the coming years. The firm added the decentralized AI protocol Bittensor to its list of top 20 cryptocurrencies to watch in future — alongside other new entrants like Sui and Celo.
Source: Grayscale
Moreover, former Binance CEO Changpeng Zhao announced his plans to invest in AI and blockchain technology.
This, combined with Vice President Kamala Harris’ recent pledge to make the US dominant in blockchain and AI paints a strong picture going forward.
Learn more about Bittensor in our deep dive.
Weekly News Roundup
In a rush? We’ve sifted through the latest and greatest news stories to bright you the most important AI industry updates for the week:
- OpenAI is set to go for-profit: The pioneering AI firm is looking to restructure its organization to become a for-profit benefit corporation. The move will give CEO Sam Saltman equity and will aim to balance profit with societal good. Meanwhile, CTO Mira Murati is leaving the firm.
- Meta announces Llama 3.2: The latest version of the Llama model was announced last week, with enhanced efficiency, multimodal support and support for more devices.
- RippleX teases AI fund: The blockchain technology division of Ripple, known as RippleX, is looking to fund new startups building in the AI space through the XRPLGrants AI Fund.
- Grayscale opens Decentralized AI fund to investors: Investors can now gain exposure to a range of decentralized AI opportunities in a single investment vehicle. Current holdings include Near (NEAR), Render (RNDR), Bittensor (TAO) and Filecoin (FIL).
The Potential of AI Coins
Historically, Bitcoin tends to gain market share during the early stages of a bull market. This is usually followed by a period where altcoins claw back market share as the most popular tokens accumulate impressive returns.
>> In 2017, decentralized currencies like Bitcoin Cash (BCH), Litecoin (LTC) and XRP stole the spotlight.
>> In 2021, smart contract platforms like BNB Chain (BNB), Solana (SOL), Polkadot (DOT) and Avalanche (AVAX) garnered the most attention.
>> In 2025, AI tokens may be among the best performers. Projects with solid fundamentals, a strong community, growing adoption and clear long-term potential may outperform the market average.
It is clear that predicting the next leading narrative and establishing an early position in its biggest winners can be an incredibly profitable strategy. With that in mind, let’s take a look at a handful of indicators to see how crypto AI stacks up against other sectors:
Search Volume
If we look at Google search trends for different promising categories, we find that AI completely dominates other sectors in terms of absolute search volume.
If we further narrow it down by searching the term “crypto AI” we still find a significant lead.
Relative Performance
According to DeFiLlama’s narrative tracker, AI is the 3rd best sector by percentage growth over the last 30 days (behind Memecoins and NFT marketplace tokens).
Trading Volume
By comparing the trading volume to market cap ratios of different sectors, we can tease out which have a higher demand. We find the following ratios for crypto AI compared to other promising sectors:
- AI: 12.7%
- RWA: 16.7%
- Memecoin: 27.9%
- GameFi: 20%
Overall, the AI sector stacks up well in terms of search volume and relative performance but falls short when it comes to relative trading volume.
If trading volume picks up in the months ahead, this would bode well for the sector as a whole.
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