Vitalik Buterin has backed a slower pace of AI data center expansion as AI-linked cryptocurrencies record a 29.7% drop over the past month, falling almost three times as much as Bitcoin. The sharp sell-off has raised fresh questions about whether the AI crypto bubble is beginning to deflate.

Ethereum co-founder Vitalik Buterin said on Sunday that slowing the race to build AI data centers could be a positive step. His comments arrive as investor excitement around AI-related crypto projects continues to weaken. Buterin shared his thoughts in a post on X.

He also pushed back against what he described as the “strong emotional reaction” to the anti-data-center movement.

The movement gained momentum during last week’s voting. Ballotpedia reported that voters in 10 states considered 41 local ballot measures related to data centers on November 3. Of these, 28 proposals would have imposed construction restrictions through bans or temporary moratoriums if approved. Following the vote, Senator Bernie Sanders called for a “national data center moratorium now,” joining several Democrats seeking to limit the rapid expansion of AI infrastructure.

The cooling sentiment has also affected the AI crypto sector. Seven of the largest AI tokens recorded an average loss of 29.7% over the past 30 days, compared with Bitcoin’s 10.7% decline.

The growing weakness raises a critical question: Could the AI crypto bubble be bursting as calls to slow AI development gain traction?

Discover: Bitcoin Slides to $73,510 Over the Weekend: Did Nvidia Scandal Trigger BTC’s $2,000 Flash Crash?

Vitalik Buterin Says Slowing AI Expansion Could Offer More Benefits Than Risks

Buterin explained his position through three key arguments, noting that his reasoning did not depend on “controversial ‘doomer arguments’.”

His first argument concerns the length of the delay. Advances in algorithms could allow existing data centers to achieve within four years, or possibly sooner, the performance that larger facilities might deliver in two years.

His second point emphasizes the importance of additional preparation time. Buterin argued that society needs more time to strengthen its defenses against cybersecurity vulnerabilities and biological threats.

The third argument focuses on scientific progress. Research depends on multiple factors beyond artificial intelligence, meaning a one-year slowdown in AI development would likely delay broader scientific advancement by considerably less than a year.

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

His position reflects the “d/acc” philosophy he introduced in 2023. The framework prioritizes the advancement of defensive technologies and was outlined in his essay My techno-optimism.

Market Intelligence: Crypto Analyst Predicts Best Low-Cap Crypto

AI Crypto Tokens Lose Ground as Market Hype Fades

AI-focused cryptocurrencies are among the digital assets most directly exposed to the artificial intelligence investment narrative. These projects include decentralized computing networks, AI agent platforms, and ecosystems that reward users for training machine learning models. CoinGecko estimated the sector’s market capitalization 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 highlights the extent of the recent sell-off.

Worldcoin (WLD) experienced the largest decline, losing 43.2%. The Artificial Superintelligence Alliance token (FET) dropped 37.5%, while NEAR declined 33.9%.

Render (RENDER) recorded a comparatively smaller loss of 17.1%. However, the token still underperformed Ether, which fell 16.1% during the same period.

Several AI cryptocurrencies also remain well below their yearly peaks. Internet Computer (ICP) is down 74.8% from its highest level over the past year. Virtuals Protocol (VIRTUAL) has declined 67.4%, while FET remains 63.9% below its peak.

The sell-off coincides with rising concerns about AI-related spending across equity markets. Thursday’s semiconductor stock decline pushed Bitcoin below its 200-day moving average. AI tokens, which previously benefited from strong investor interest in the artificial intelligence narrative, have suffered more substantial losses as market enthusiasm cools.

Local efforts to restrict data center construction have introduced another potential challenge for cryptocurrencies linked to computing infrastructure. However, Buterin’s argument suggests that slower infrastructure growth does not necessarily mean AI demand will decline. Continued improvements in algorithms could allow existing hardware to support increasingly advanced AI applications.

Market Intelligence: Crypto Analyst Predicts Best New Crypto to Hodl

Ethereum Price Analysis: Will ETH Hold the $2,060 Support Level?

Ether remained above the $2,060 support level on Sunday, although the price structure remains fragile. ETH is trading at $2,104 on Binance, down 16.1% over the past 30 days. The cryptocurrency briefly touched $2,060 late Sunday, reaching its lowest price since August 19.

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

Resistance levels: Ethereum’s first resistance lies at $2,246, corresponding to Sunday’s high. The next major barrier is $2,311, aligned with the 200-day EMA. A sustained move above this level could open the path toward $2,450, Wednesday’s high.

Support levels: The immediate support remains at $2,060, the low recorded on Sunday. If ETH breaks below this level, the next potential downside target is $1,854, corresponding to the August 11 low.

As uncertainty continues to spread across the cryptocurrency market, AI-related tokens remain a key area of focus. These assets experienced some of the strongest gains during the AI boom, but they are now facing accelerated selling pressure as investor sentiment shifts.