The state of the cryptocurrency market is anything but straightforward this week.
While improving on-chain metrics and seasonality suggest a bullish Q4 awaits, there are undertones of pessimism and suspicions that the best months of 2025 are already behind us.
The CMC Crypto Fear and Greed Index currently flashes slight fear, but many investors are busy reworking their portfolios to maximize their returns in the months ahead.
AI Market Roundup
Despite a last‑minute recovery, the AI sector has struggled since our last update. The sector shed ~$2.3 billion from its market capitalization (mcap), equivalent to a 6.7% week‑on‑week decline.
Indeed, the top 10 largest AI tokens are all in the red this week, with Story (IP) faring the worst after a staggering 34.5% decline.
It’s not all doom and gloom. A small cohort of small‑ to mid‑cap AI tokens managed to buck the trend completely and gained upwards of 20% apiece this week.
This week’s best performers and their catalysts (where known) include:
- •AI Companions (AIC): +69.9% (Speculative rally after seven‑figure buyback/burn announcement)
- •Victoria VR (VR): +64.8% (Marketing push: “AI Season” campaign)
- •KAITO (KAITO): +30.5% (Launchpad presale momentum and higher volumes)
- •Grass (GRASS): +24.4% (Unclear catalyst)
The trending list is dominated by smaller players in the ~$50 million mcap range, suggesting small caps are beginning to gather momentum.
The AI Agent subsector also put on a poor display this week, with just ~23% of the top 100 by mcap staying in the green. AI Rig Complex (ARC) and tokenbot (CLANKER) continue to pull in significant volume and have shown positive returns this week, but remain extremely volatile.
Overall, most sectors are down week‑on‑week, but the AI sector was hit particularly hard. Per data from Artemis, it was the fourth‑worst‑performing sector (out of the 24 tracked) in the last seven days.
AI News Recap
The AI sector saw several major headlines this week. A key theme is growing investments from established crypto players.
Below, we provide a recap of the most significant developments to bring you up to speed.
Cloudflare Unveils NET Dollar Stablecoin for the Agentic Web: Cloudflare announced NET Dollar, a USD‑backed stablecoin designed to power micro‑payments and autonomous agent transactions online, aligned with open standards like x402 to enable instant, secure settlement.
SwissBorg Backs Hub.xyz: Crypto wealth management platform SwissBorg made a strategic investment in Hub.xyz, pairing capital with distribution to ~1M KYC’d users and in‑app community allocations. It will also let its community run nodes, contributing idle bandwidth for people‑powered AI data infrastructure. (source)
Datavault AI Secures up to $150M From Scilex: Datavault AI has signed a securities purchase agreement with Scilex Holding to fund an AI supercomputer and independent data exchanges. The first tranche has closed, with a second tranche via a pre‑funded warrant to follow. (source)
>>> That’s a wrap for this update. Join us next week for another digest on the latest and greatest in crypto AI.