Not Every AI Needs Its Own Token: CZ’s Bold Take on the Hype

The AI and crypto worlds have been colliding at full speed, promising a future where artificial intelligence agents transact seamlessly using blockchain technology. However, according to Binance founder Changpeng Zhao (CZ), not every AI project needs to mint its own token. And judging by the market’s response, he might just be right.

The AI Crypto Bubble?

Artificial intelligence agent-related tokens have taken a beating in recent months. Once hailed as the next big thing, these AI tokens have collectively seen their market capitalization plunge by 61% from their peak of $70.4 billion. In just the past month, they’ve dropped another 21%, now hovering around $27 billion. While broader market corrections have played a role, CZ argues that the real issue is a lack of intrinsic utility.

In a March 17 post on X (formerly Twitter), CZ didn’t mince words:

“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.”

His message is clear—many AI projects are jumping on the crypto bandwagon not because they need a token, but simply to raise funds. It’s a move that often leads to overhyped projects with no real product backing them.

AI Tokens Are Struggling to Justify Themselves

The crypto industry is no stranger to hype cycles, and AI-focused cryptocurrencies seem to be the latest victim. While there’s no doubt that AI agents could benefit from blockchain’s security and decentralization, the assumption that every project needs its own token is now being questioned.

CZ’s argument highlights a fundamental issue: launching a cryptocurrency is not the same as delivering a useful product. Too many projects are minting tokens without a concrete use case, hoping that speculation alone will drive adoption. But investors are becoming more cautious, and the numbers don’t lie—the AI token market is bleeding.

The Venture Capitalists Are Watching

Despite the downturn, venture capital firms like Pantera Capital and Dragonfly remain optimistic about the future of AI agents. However, they have yet to make significant investments in the space, signaling a cautious approach. Their hesitancy may stem from the fact that many AI projects are still in their infancy, with uncertain paths to real-world adoption.

At Consensus 2025 in Hong Kong, panelists discussed AI agents and their potential but also acknowledged the risks of premature token launches. If an AI agent provides real value, it doesn’t necessarily need a separate cryptocurrency—it can simply charge fees for existing digital assets.

The Road Ahead: Focus on Utility, Not Just Hype

CZ’s advice is straightforward: focus on building something useful before thinking about launching a coin. It’s a sentiment that resonates across the broader crypto industry, where many projects have risen and fallen based on hype rather than substance.

As AI and blockchain continue to evolve, the key question will be whether AI-driven platforms can prove their worth beyond just issuing tokens. The AI crypto market may be down, but for projects that genuinely solve problems, the future still holds promise.