The AI token market is experiencing a significant downturn, highlighted by Sahara AI’s 74% decline from its peak of $0.3264 just one day post-launch, and Humanity Protocol’s staggering 87% drop from $0.1575 within a mere 48 hours.
Sahara AI, operating on the Ethereum blockchain, initially surged by an impressive 40,389% following its entry on Binance, only to see a swift 73% retracement in less than 11 hours.
Source: CoinMarketCap
Despite making appearances on prominent exchanges like Upbit, OKX, and Bybit, the overwhelming selling pressure from early investors vastly outstripped buyer interest, leading to a market capitalization reduction down to $180.27 million.
Similarly, Humanity Protocol has witnessed an 87.4% drop, resulting in a market cap of $36.34 million. The project’s trading volume declined by 47.85% in one day, settling at $64.27 million, reflecting waning trader confidence amid a landscape ripe with broader AI narratives.
Source: CoinMarketCap
This dramatic downturn stands in stark contrast to the encouraging fundamental adoption data. A recent report from DappRadar underscored a remarkable 86% increase in AI-related on-chain activity since January, with 4.5 million daily unique active wallets reported.
AI currently boasts a 19% slice of the market share, closely approaching gaming’s 20% dominance, having begun 2025 at only 9%.
A broader examination of the AI token market reveals discrepancies between the underlying fundamentals and current valuations. The total market cap has plummeted 64% from $16.6 billion in early June to its present figure of $5.9 billion. However, daily trading volumes remain robust at $1.4 billion, suggesting ongoing speculative interest.
Furthermore, capital inflows indicate a contradictory trend, as AI agent projects secured $1.39 billion in 2025, a 9.4% rise over the entirety of 2024’s investment totals.
Virtuals Protocol has been particularly prolific, launching over 17,000 agents since November 2024, averaging 85 new deployments per day.
Source: Dune
Token Crash Highlights Market’s Speculation Issues
The rapid shift in Sahara AI’s fortunes—from astonishing highs to drastic lows—underscores the extreme volatility inherent in the AI token sector.
Major exchange listings, usually a catalyst for price stability, failed to prevent severe sell-offs for both Sahara AI and Humanity Protocol as early investors seized profits.
A tweet highlighted the disillusionment among investors just two days after the token generation event, citing the lack of communication from the Humanity Protocol team and a stark 80% decline in token price, despite being locked in. Investor sentiment reflects a broader frustration regarding transparency and project execution.
— Big Wiz (@WisdomMatic) June 27, 2025
The trading pairs for SAHARA against USDT and KRW experienced the highest volumes during this downturn.
This trend is not isolated to the SAHARA token. Over the past several months, AI tokens have demonstrated greater speculative tendencies than utility-focused assets.
With just 20.4% of Sahara’s total supply of 10 billion tokens in circulation, the project has a fully diluted valuation of $883.72 million, despite limited evidence of practical applications.
Research conducted by Phut Crypto indicates severe challenges within the AI token landscape. Their findings revealed that 88% of AI agent tokens have failed, with a troubling average lifespan of only 17 days. Additionally, 75% of traders involved in AI agent tokens are currently facing losses.
Source: Phut Crypto
This pattern suggests that many projects are prematurely launching tokens to ride the wave of narrative momentum, rather than focusing on sustainable value generation.
Nevertheless, the rapid deployment of over 17,000 agents by Virtuals Protocol signals real technological advancements; however, this innovation is not currently reflected in the associated token prices.
Source: Dune
Industry analysts caution that existing tokenomics models may be fundamentally flawed. Irina Karagyaur, CEO of BQ9, forecasted a potential collapse of centralized AI systems by 2030, which could adversely impact aligned crypto projects.
Initiatives that heavily depend on partnerships with OpenAI or Anthropic may face critical vulnerabilities should those platforms falter.
Decentralized Infrastructure Represents Long-Term Promise
Despite the turmoil within the token markets, the core blockchain infrastructure underpinning AI applications reveals significant strength and growth potential.
DappRadar’s insights show that user engagement remains steady across various chains, with Matchain leading with 1.9 million daily users, followed closely by opBNB and Nebula networks.
Geographically, Europe is at the forefront of AI decentralized application interactions, accounting for 26.2%, followed by Asia at 21.9% and North America at 15.8%.
Source: DappRadar
In contrast to speculative tokens, this foundational layer appears better equipped for sustainable development.
Decentralized Physical Infrastructure Networks (DePIN) projects are poised to offer cost-efficient alternatives to centralized cloud services by distributing computational workloads across millions of global nodes.
Real-world use cases for AI are emerging beyond mere speculation. AI agents are now being utilized as DeFi assistants, social media aides, and gaming partners, adding tangible utility that transcends token price volatility.
Investment behavior reflects this trend toward utility, shown by the $1.39 billion raised by AI agents in 2025, increasingly focused on bolstering infrastructure rather than speculative trading.
Projects involving decentralized computation, privacy protection, and sustainable business models are appealing more to institutional investors.
Karagyaur envisions a future ‘Internet of Value,’ where the merger of AI and blockchain will yield everyday tools that safeguard user privacy while enabling income for data contributors.
What would happen if OpenAI and similar AI companies were to collapse by 2030? A recent essay explored the implications for the crypto landscape, particularly concerning AI-linked assets.
— Finance Newso.com (@Finance Newso) June 17, 2025
This contrast emphasizes a significant shift away from token-centric strategies that prioritize immediate speculation, aiming instead for enduring value creation.
As the sector matures towards utility-focused applications, the recent token crashes could be seen as necessary corrections rather than outright failures, indicating that ventures concentrating on genuine AI capabilities, pragmatic tokenomics, and real-world solutions are well-positioned for survival amid market volatility.
The post Sahara AI Down 74% After Launch, Humanity Protocol Drops 87% in Days – Is the AI Token Hype Over? appeared first on Finance Newso.
