Binance CEO Changpeng Zhao (CZ) believes AI crypto initiatives are doing a huge blunder—prioritizing token launches over creating actual utility.
Zhao’s opinions on X, and it appears the market is in sync. Over the past month, cryptocurrencies related to AI have fallen more than 21%, currently at about $27 billion. That’s a jaw-dropping 61% fall from their December 2023 highs, erasing billions in market cap.
In a March 17 post on X (formerly Twitter), CZ stated, “While crypto is the currency for AI, not every agent needs its own token. Agents can take fees in an existing crypto for providing a service. Launch a coin only if you have scale. Focus on utility, not tokens.”
His point is simple—many AI projects create tokens not because they need them, but to raise money. However, just having a token doesn’t guarantee success. Without a strong product or real-world use case, these projects struggle to maintain investor confidence, leading to market crashes.
The crypto space has experienced numerous hype cycles, and AI tokens appear to be the latest casualty. Although blockchain can be useful for AI by offering security and decentralization, creating a new token for each project is not required. AI platforms can continue to function well by charging fees in established cryptocurrencies such as Bitcoin or Ethereum.
Numerous AI ventures have been more concerned about token launches than creating valuable products. This has resulted in doubt among investors and a decreasing market for AI-associated cryptocurrencies.
Despite the current struggles, major venture capital firms like Pantera Capital and Dragonfly still see potential in AI agents. However, they have been hesitant to invest heavily, likely because most AI crypto projects are still in early development and lack proven business models.
At the Consensus 2025 event in Hong Kong, industry professionals debated AI and cryptocurrency, concluding that AI agents do not always require their own coins to be successful. A competent AI service can earn money by taking payments in existing digital currencies.
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