Vitalik Buterin Advocates AI Caution While AI Crypto Tokens Suffer a 30% Collapse

Ethereum co-founder Vitalik Buterin has expressed support for slowing the rapid expansion of AI data centers, as AI-related cryptocurrencies suffer an average decline of 29.7% over the past month. The losses are nearly three times Bitcoin’s decline, raising concerns that the AI crypto bubble may be losing momentum.

In a Sunday post on X, Buterin argued that slowing the race to expand AI computing infrastructure could produce positive results. His comments come amid weakening investor interest in AI-focused digital assets and growing opposition to large-scale data center construction.

Buterin also questioned the strong criticism directed at the anti-data-center movement, describing it as an excessive “strong emotional reaction.”

The movement gained political attention last week. According to Ballotpedia, voters in 10 states considered 41 local ballot measures concerning data centers on November 3. Twenty-eight of those proposals would have restricted new construction through bans or temporary moratoriums if approved. Following the vote, Senator Bernie Sanders demanded a “national data center moratorium now,” adding to calls from several Democrats to reconsider the pace of AI infrastructure development.

Meanwhile, AI-focused cryptocurrencies are experiencing a significant downturn. Seven of the largest tokens in the sector have lost an average of 29.7% over the past 30 days, compared with Bitcoin’s 10.7% decline.

The contrasting developments have brought renewed attention to the possibility that the AI-driven crypto rally is reversing as concerns about the industry’s expansion increase.

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Vitalik Buterin Outlines Three Reasons to Slow the AI Data Center Race

Buterin presented three arguments explaining why a slower expansion of AI computing infrastructure could benefit society. He stressed that his position did not require accepting “controversial ‘doomer arguments’.”

His first argument focused on technological efficiency. Improvements in algorithms could allow existing data centers to deliver within four years, possibly sooner, the computing capabilities that larger facilities might achieve in two years. This suggests that aggressive infrastructure expansion may not be necessary to maintain technological progress.

Second, Buterin highlighted the security benefits of gaining additional time. He argued that society needs every available opportunity to strengthen its defenses against cybersecurity threats and biological risks.

His third argument addressed the impact on scientific research. Since research progress depends on many factors beyond artificial intelligence, he believes a one-year slowdown in AI development would have a much smaller effect on the overall pace of scientific advancement.

Summarizing his position, Buterin stated that “a slowdown in compute hyper-scaling seems quite net good.” He added that even if the decision ultimately proved mistaken, its consequences would not be worse than “10+ other political things.”

The argument is consistent with his broader technological philosophy, known as “d/acc,” which he introduced in 2023. The framework emphasizes developing defensive technologies and strengthening society’s ability to manage emerging technological risks. Buterin discussed the concept in his essay My techno-optimism.

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AI Crypto Tokens Record Steep Losses as Investor Confidence Weakens

AI-related cryptocurrencies remain one of the market segments most directly influenced by the artificial intelligence boom. Their ecosystems cover decentralized computing services, autonomous AI agents, and platforms that compensate participants for training machine learning models. CoinGecko estimated the sector’s combined market capitalization at $18.9 billion on Monday morning.

A review of seven major AI tokens listed on Binance alongside Bitcoin and Ether shows that AI-focused assets have experienced considerably heavier selling pressure over the past month.

Worldcoin (WLD) led the declines, falling 43.2%. The Artificial Superintelligence Alliance token (FET) followed with a 37.5% loss, while NEAR dropped 33.9%.

Render (RENDER) showed comparatively stronger performance, although it still declined 17.1%. Ether performed slightly better, recording a 16.1% loss over the same period.

The longer-term picture also highlights the damage across the sector. Internet Computer (ICP) is trading 74.8% below its highest level over the past year. Virtuals Protocol (VIRTUAL) has declined 67.4%, while FET remains 63.9% below its yearly peak.

The weakness in AI tokens mirrors growing concerns about excessive spending on artificial intelligence across traditional financial markets. Thursday’s semiconductor sell-off pushed Bitcoin below its 200-day moving average, while AI-focused cryptocurrencies experienced even greater losses as enthusiasm surrounding the sector declined.

Potential restrictions on new data center projects are adding another layer of uncertainty for crypto networks that depend on selling computing resources. However, Buterin’s position offers a different interpretation of the situation. If algorithmic improvements continue to increase AI performance using existing hardware, slower data center construction may not necessarily translate into weaker demand for AI services.

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Ethereum Price Analysis: Can ETH Defend the $2,060 Level?

Ether managed to stay above $2,060 on Sunday, but its recovery remains vulnerable. ETH is currently trading around $2,104 on Binance, representing a 16.1% decline over the past 30 days. The cryptocurrency briefly touched $2,060 late Sunday, marking its weakest price since August 19.

Ethereum is also trading below both of its daily exponential moving averages (EMAs), indicating continued technical weakness. The 200-day EMA currently sits at $2,311, while the 50-day EMA is positioned at $2,370.

Resistance levels: The first hurdle for ETH is $2,246, which represents Sunday’s high. A move above this level would bring the 200-day EMA at $2,311 into focus. Beyond that, traders may watch $2,450, corresponding to Wednesday’s high.

Support levels: The $2,060 mark remains Ethereum’s immediate support. A break below this level could expose ETH to further downside toward $1,854, the low recorded on August 11.

For cryptocurrency investors monitoring signs of a broader market bubble, AI tokens deserve particular attention. These assets benefited significantly from the artificial intelligence narrative during the rally, but their recent performance suggests that speculative demand is weakening faster than in the wider crypto market.