AI Token Prices Plummet 64% Despite Soaring User Activity

While the Web3 AI sector is booming in user engagement, AI token prices are telling a different story.

According to the latest report from DappRadar, on-chain activity involving AI agents has surged by a massive 86% since January 2025, with over 4.5 million active wallets per day recorded in June. The AI sector now commands 19% of total Web3 activity, almost overtaking the historically dominant gaming sector at 20%.

But despite this remarkable user growth, the market capitalisation of AI tokens has taken a significant hit, plunging 64% from their early June peak of US$16.6 billion to just US$5.9 billion.

Daily trading volumes remain strong at around US$1.4 billion, signalling that the sector is still highly volatile and actively traded — albeit with declining prices.

The AI boom has continued to attract fresh capital. So far in 2025, Web3 AI projects have raised a total of US$1.39 billion, already surpassing the full-year fundraising figure for 2024 by 9.4%. Leading the charge is Virtuals Protocol, a fast-growing platform that has launched over 17,000 decentralised AI agents since November 2024, averaging 85 new agents daily.

However, it's not all good news. The report also raises red flags about the current state of the AI token market. It warns that many tokens remain driven more by hype than by utility, creating a low signal-to-noise ratio that is starting to concern investors.

"There’s been an explosion in activity, but not all projects are delivering tangible value," the report stated. "We're seeing a shift towards more selective investment, with capital flowing into AI protocols that offer real-world use cases and demonstrate scalability."

This shift is significant. As the market matures, investors are clearly moving away from speculative plays and focusing on projects that can deliver long-term impact, rather than simply riding the AI narrative.

Some analysts believe this is a healthy correction. While price drops can spook retail investors, they may help clear out unsustainable projects, allowing high-quality platforms with strong fundamentals to rise.

“This is a pivotal moment for Web3 AI,” said one industry observer. “We’ve seen mass user adoption, now the market’s demanding real value in return. The ones that survive this shakeout could become the Googles and Amazons of decentralised AI.”

The coming months will likely be a test of endurance. With geopolitical uncertainties, economic shifts, and increased scrutiny on AI ethics, only the most grounded and utility-driven AI crypto projects are expected to thrive.

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