Vitalik Buterin Calls for AI Slowdown as AI Tokens Crash 30%: Is the Crypto Bubble Bursting?

Vitalik Buterin has voiced support for slowing the expansion of AI data centers. AI tokens have dropped 29.7% over the past month, nearly three times Bitcoin’s decline. Could the AI crypto bubble be on the verge of bursting?

Ethereum co-founder Vitalik Buterin said on Sunday that putting the brakes on the AI data center expansion could be beneficial, as enthusiasm surrounding AI-related crypto tokens continues to fade. He shared his views in a post on X.

Buterin also challenged what he described as the “strong emotional reaction” opposing the anti-data-center movement.

The movement gained momentum last week. According to Ballotpedia, voters across 10 states considered 41 local ballot measures related to data centers on November 3. A favorable vote on 28 of those proposals would have restricted construction through bans or temporary moratoriums. Following the results, Senator Bernie Sanders urged a “national data center moratorium now,” joining several Democrats seeking to curb the rapid expansion of AI infrastructure.

The crypto sector’s AI-focused segment has also come under pressure. Seven of the largest AI tokens recorded an average decline of 29.7% over the past 30 days, nearly three times Bitcoin’s 10.7% loss during the same period.

This raises a key question: Is the AI slowdown advocated by Buterin already contributing to the collapse of the AI token bubble?

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Vitalik Says Slowing the AI Race Could Bring Benefits With Minimal Costs

Buterin outlined three primary arguments supporting his position, emphasizing that his reasoning did not rely on what he called “controversial ‘doomer arguments’.”

The first argument concerns the limited duration of the delay. Improved algorithms could allow existing data centers to achieve within four years, or potentially sooner, what larger facilities might accomplish in just two years.

The second point highlights the value of additional preparation time. Buterin argued that society needs as much time as possible to strengthen its defenses against cybersecurity threats and biological risks.

His third argument focuses on scientific research. According to Buterin, scientific progress depends on numerous factors beyond AI. Consequently, a one-year slowdown in AI development would delay scientific advancements by considerably less than a full year.

He ultimately concluded that “a slowdown in compute hyper-scaling seems quite net good.” Buterin added that even if the approach turned out to be incorrect, its consequences would not be worse than “10+ other political things.”

This perspective aligns with Buterin’s broader philosophy, which he has promoted since 2023 through his “d/acc” framework. The concept prioritizes the development of defensive technologies and was introduced in his essay titled My techno-optimism.

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AI Crypto Tokens Are Already Losing Momentum

AI tokens represent the crypto segment most closely connected to the artificial intelligence boom. These projects include platforms offering computing resources, AI agent networks, and systems that reward participants for training machine learning models. CoinGecko estimated the sector’s market value at $18.9 billion on Monday morning.

A comparison of the 30-day performance of seven major AI tokens listed on Binance against Bitcoin and Ether reveals significant weakness across the sector.

The biggest losses came from Worldcoin (WLD), which declined 43.2%, followed by Artificial Superintelligence Alliance (FET) with a 37.5% drop and NEAR with a 33.9% decline.

Render (RENDER) performed relatively better, losing 17.1% over the same period. However, its decline still exceeded Ether’s 16.1% loss.

Several tokens also remain deeply below their respective yearly peaks. Internet Computer (ICP) is trading 74.8% below its highest level over the past year, while Virtuals Protocol (VIRTUAL) has fallen 67.4% and FET is down 63.9%.

The broader sell-off reflects growing concerns about AI-related spending in traditional financial markets. Thursday’s chip-stock downturn pushed Bitcoin below its 200-day moving average. AI tokens, which benefited significantly from the artificial intelligence narrative during the rally, have also experienced sharper declines as investor enthusiasm weakens.

The growing number of local proposals to restrict data center construction introduces another potential headwind for tokens tied to computing infrastructure. However, Buterin’s argument offers a different perspective. If advances in algorithms continue to improve AI capabilities using existing hardware, a slower infrastructure expansion may not necessarily eliminate demand for AI services.

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Ethereum Price Analysis: Can ETH Maintain Support at $2,060?

Ether managed to hold its support level on Sunday, although the margin remains narrow. ETH is trading at $2,104 on Binance, representing a 16.1% decline over the past 30 days. The cryptocurrency briefly touched $2,060 late Sunday, marking its lowest price since August 19.

Ethereum is currently trading below both its daily exponential moving averages (EMAs), which assign greater weight to recent price movements. The 200-day EMA stands at $2,311, while the 50-day EMA is positioned at $2,370.

Resistance levels: The first resistance is located at $2,246, corresponding to Sunday’s high. The next barrier stands at $2,311, aligned with the 200-day EMA. A further recovery could bring $2,450, Wednesday’s high, into focus.

Support levels: Ethereum’s immediate support is at $2,060, the low recorded on Sunday. If ETH breaks below this level, the next potential support lies near $1,854, corresponding to the August 11 low.

For investors assessing whether the broader crypto bubble is beginning to burst, AI tokens remain a critical segment to monitor. These assets surged rapidly during the AI-driven market rally, but they are now experiencing some of the steepest losses as sentiment shifts.

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