It has been a tumultuous week for the artificial intelligence sector in crypto. Sharp valuation downturns, regulatory revamps, and some unexpected winners have marked a week of heavy turbulence.

While the broader AI sector took a hit, with certain indexes showing double-digit losses, Fartcoin—a meme-based token—surprised everyone with its health and a price bump. It got listed on Coinbase, which is nifty and ironic. While Fartcoin went up, draiftking (DKING) sort of shot up after a major fund announcement.

One of the most dramatic weeks related to AI and crypto has unfolded recently. Let’s take a closer look.

AI Sector Sheds $1.9 Billion, Altcoins Sputter

The artificial intelligence sector in cryptocurrencies lost significant ground this week. It dropped to 11.6% in total market capitalization. That equates to a $1.9 billion plunge. That’s the third-worst performance across the broader category of cryptocurrency.

This drop corresponds to Bitcoin dipping to a low of approximately $103,000. By the end of the week, Bitcoin had recovered to around $106,500. But in the middle of that week, it’s very clear that alts were just not performing at all. And this same Bitcoin showing the opposite behavior.

So, what’s the reaction? Bitcoin’s market share is at 64%. People are obviously running back to the safer bet, which is blue chip Bitcoin.

Market sentiment mirrored these prudent moves. The Crypto Fear & Greed Index slipped back to neutral, showing that investors are somewhat hesitant, thanks to the growing volatility and the altcoin narrative’s lack of direction.

Among significant projects associated with artificial intelligence, Render (RNDR) dropped 10.2%. Other popular tokens did not fare much better: TAO, Internet Computer (ICP), NEAR, and Fetch.ai (FET) sustained losses ranging from 6% to 8%. And despite the recent excitement and development activity surrounding them, these projects failed to draw much in the way of buying interest during the latest risk-off equity market move.

Winners of the Week: DKING, VADER, and the Unlikely Rise of Fartcoin

Among the slaughter, a few AI tokens managed to break through the gloom—and none more surprisingly than Fartcoin. The humor-laden memecoin, which has capably leveraged a blend of AI themes and viral internet culture, pumped 10.9% after it was announced that it would be listed on Coinbase. The listing—done on a day when many anticipated the overall market would collapse—put Fartcoin (capitalization $65 million) in the spotlight, and with much of the crypto market going in reverse, here nonetheless was a token going up.

At the same time, draiftking (DKING) was the clear standout performer of the week, soaring 160% after the announcement of a partnership deal with a major fund worth $300 million. The partnership is expected to provide DKING with liquidity, developmental support, and new exposure for its AI-driven betting and prediction platform. VaderAI (VADER) also enjoyed a strong week, posting gains of 53.2% as renewed excitement around the project’s upcoming Virtuals Protocol seemed to lift all boats.

These outliers taken together suggest that even though there’s a sector-wide pullback, investors are putting down their chips on projects and tokens they really believe in or that have some cool, funny twist.

🚀 Week in AI: Fartcoin Defies Bleeding AI Sector.

AI sector drops -11.6%! FARTCOIN lists on Coinbase and pumps +10%! DKING rips +160%! U.S. House pushes 10-year AI freeze! TRNR goes all-in on FET!

Let’s break down AI’s wild week 🧵

1/6 pic.twitter.com/EBNrNQjsFQ

— CoinMarketCap (@CoinMarketCap) June 17, 2025

AI Regulation: U.S. House Pushes 10-Year Freeze on State Rules

One of the week’s biggest stories came out of Washington, where the U.S. House of Representatives passed a comprehensive 10-year prohibition on state AI laws. If the bill becomes law, it would prevent U.S. states from passing their own AI policies. The federal government, under a single set of rules, would be responsible for regulating AI, effectively making it the decider-in-chief on all AI matters.

Proponents say the action would bring together AI regulation and make it all the more effective for businesses to comply, thereby promoting innovation. But a lot of folks—especially in Silicon Valley—argue that these guys are just pushing for a regime that will be easy for businesses to comply with and will promote a lot of kind of AI innovation that may not align with a lot of people’s values.

The Senate now holds the future of the bill, and it is predicted to face an intense debate there. Should it pass, the legislation might rank as one of the most significant pieces of artificial intelligence policy ever enacted in the United States. Its effects could be felt across an array of sectors, from those developing self-driving cars to businesses using algorithms for trading.

Ecosystem Developments Offer Glimmers of Hope

Notwithstanding the volatile price action and regulatory uncertainty, we nonetheless saw some significant ecosystem wins. Blockticity unveiled the launch of a new Avalanche Layer 1 network tailored for the AI-powered trade verification sector. The platform is already processing $1.2 billion in goods and aims to deliver scalable, AI-integrated solutions for the supply chain logistics space.

In other places, asset management firm TRNR articulated a roadmap for securing $500 million. The firm plans to use the largesse to purchase and maintain Fetch.ai’s FET tokens, which will amount to 10 percent of FET’s circulating supply when the deal is done. The purchase is part of a diversification strategy, as TRNR seeks to maintain assets that are increasingly decoupled from the volatility gripping traditional financial markets. It’s not the only institutional investor that has recently announced plans to acquire AI-focused assets.

While the AI sector seeks to reestablish itself, this week has underscored both the perils and the incredible prospects that still characterize this milieu. Be it memecoins moving rapidly or legislators remaking the rules, one thing is obvious: when it comes to AI crypto, don’t be shocked by surprises.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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