Vitalik Buterin has endorsed slowing the rapid growth of AI data centers, while AI-related cryptocurrencies have plunged 29.7% over the past month, significantly exceeding Bitcoin’s losses. The steep decline is fueling speculation that the AI crypto bubble could be starting to unravel.
Ethereum co-founder Vitalik Buterin said on Sunday that limiting the pace of AI data center expansion may ultimately benefit society. His remarks come as the speculative hype surrounding AI-focused crypto projects continues to diminish. Buterin expressed his position in a post on X.
He also challenged what he described as the “strong emotional reaction” directed against the anti-data-center movement.
Opposition to AI infrastructure expansion gained traction last week. Ballotpedia reported that voters in 10 states considered 41 local ballot measures concerning data centers on November 3. A total of 28 proposals would have restricted construction through bans or temporary moratoriums if passed. Following the voting, Senator Bernie Sanders demanded a “national data center moratorium now,” joining a broader group of Democrats seeking to slow the AI infrastructure boom.
The impact has extended into the cryptocurrency market. Seven of the largest AI-focused tokens have declined an average of 29.7% over the past 30 days, nearly three times Bitcoin’s 10.7% loss.
The sharp deterioration in prices raises questions about whether Buterin’s proposed AI slowdown is coinciding with the bursting of the AI crypto bubble.
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Vitalik Buterin Highlights the Advantages of Slowing AI Development
Buterin outlined three reasons why reducing the pace of AI expansion could be beneficial, explaining that his argument was made without relying on “controversial ‘doomer arguments’.”
His first point focused on the relatively small technological delay. According to Buterin, improvements in algorithms could enable existing data centers to achieve within four years, potentially sooner, the capabilities that larger facilities could deliver in two years.
The second argument centered on the opportunity to improve global security. Buterin emphasized that additional time could help society strengthen its defenses against cybersecurity threats and biological dangers.
His third point addressed scientific research. Since scientific progress depends on several factors beyond AI, he argued that a one-year reduction in AI development would delay broader research by considerably less than a year.
Buterin concluded that “a slowdown in compute hyper-scaling seems quite net good.” He further suggested that even if the policy proved to be a mistake, its consequences would not be more severe than “10+ other political things.”
The argument reflects Buterin’s longstanding philosophy, which dates back to 2023. Through his “d/acc” framework, he advocates prioritizing the development of defensive technologies. He introduced the concept in his essay My techno-optimism.
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AI Crypto Market Suffers as Tokens Lose Nearly 30%
AI cryptocurrencies are among the digital assets most closely linked to the artificial intelligence boom. Their ecosystems include decentralized computing networks, AI agent platforms, and projects that incentivize participants to train machine learning models. CoinGecko estimated the sector’s market capitalization at $18.9 billion on Monday morning.
An assessment of the 30-day price performance of seven major AI tokens listed on Binance, alongside Bitcoin and Ether, reveals widespread selling pressure.
Worldcoin (WLD) suffered the largest decline, dropping 43.2%. The Artificial Superintelligence Alliance token (FET) lost 37.5%, while NEAR recorded a 33.9% decrease.
Render (RENDER) posted the smallest decline among the group, falling 17.1%. Nevertheless, it still performed worse than Ether, which recorded a 16.1% decrease over the same period.
The sector’s major tokens also remain far below their previous highs. Internet Computer (ICP) is down 74.8% from its highest level over the past year. Virtuals Protocol (VIRTUAL) has fallen 67.4%, while FET remains 63.9% below its peak.
The latest losses coincide with mounting concerns about AI investment spending in the equity market. Thursday’s semiconductor sell-off pushed Bitcoin beneath its 200-day moving average. AI cryptocurrencies, which previously experienced strong gains from the artificial intelligence narrative, have now suffered some of the steepest declines as investor enthusiasm fades.
Growing opposition to data center construction through local restrictions could create additional pressure on tokens associated with computing services. However, Buterin’s perspective suggests that reducing infrastructure expansion may not necessarily weaken AI demand. If algorithmic advancements continue to improve performance on existing hardware, the need for AI services could remain strong.
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Ethereum Price Analysis: Can ETH Sustain the $2,060 Floor?
Ether managed to remain above the $2,060 support level on Sunday, although its position remains vulnerable. ETH is trading at $2,104 on Binance, marking a 16.1% decline over the past 30 days. During Sunday’s trading session, the cryptocurrency briefly touched $2,060, its lowest level since August 19.
Ethereum continues to trade beneath both daily exponential moving averages (EMAs), which give greater weight to recent price movements. The 200-day EMA is currently at $2,311, while the 50-day EMA stands at $2,370.
Resistance levels: The first significant resistance is $2,246, the high recorded on Sunday. Ethereum must overcome the $2,311 level, which aligns with the 200-day EMA, to strengthen its recovery. A move above that threshold could bring $2,450, Wednesday’s high, into consideration.
Support levels: The immediate support zone is $2,060, corresponding to Sunday’s low. If ETH falls below this level, the next downside target could be $1,854, the price low recorded on August 11.
With growing uncertainty surrounding the crypto market, AI tokens remain a key indicator of investor sentiment. These cryptocurrencies surged during the AI-driven rally but are now experiencing significant declines as enthusiasm surrounding the sector weakens.
