Artificial intelligence agents need to prioritize their intrinsic utility

AI agent-related tokens have significantly declined over the past month, as their cumulative market capitalization decreased by over 21%

The price of artificial intelligence (AI) tokens has dropped significantly over the past month, with their collective market capitalization decreasing by over 21% to reach $27 billion, according to CoinMarketCap data.

While this continues a broader crypto market correction, the lack of focus on intrinsic utility may be another reason for the decline, according to Changpeng Zhao, the founder and former CEO of Binance, the world’s largest cryptocurrency exchange.

"Launch a coin only if you have scale. Focus on utility, not tokens," Zhao wrote on March 17.

If you don't have the scale to launch a coin, don't.

Launch a coin only if you have scale. Focus on utility, not tokens.

— Changpeng Zhao (@cz_binance) March 17, 2024

Zhao's comments come during a significant downtrend for AI cryptocurrencies, which lost over 61% of their peak $70.4 billion market capitalization in the three months since they began to decline on Dec. 7.

Several venture capital firms, including Pantera Capital and Dragonfly, are interested in the future of AI agents but haven't yet invested in them, according to a panel discussion at Consensus 2025 in Hong Kong.

"We're not really seeing anything yet in the space that's really cutting through in terms of the interesting protocols or primitives that are emerging in Web3 that we'd want to invest in," said Konstantin "Kola" Kalashkov, partner at Dragonfly, during the panel discussion.

"But certainly, we're interested in the space and we're looking at it closely."

Emerging tech narrative in 2025

Industry watchers foresee a year of significant upside for the emerging field of AI cryptocurrencies.

New generation of protocols

"Platforms like ai16z and decentralized trading protocol Hyperliquid are poised for growth in 2025," said Alvin Kan, chief operating officer of Bitget Wallet.

"Emerging narratives like AI-driven investments, decentralized AI agents and tokenized assets hint at a tech-driven shift, though with added risk."