AI Tokens Crash 10% as US States Regain Power to Regulate AI

Trump’s Big Beautiful Bill no longer contains a 10-year moratorium on AI regulation, causing several setbacks for related tokens. Trade volumes and market cap for AI cryptoassets both fell over 5% in the last 24 hours.

Senators overwhelmingly shot down the moratorium in a 99-1 vote that saw pro-crypto legislators abandon the effort. Still, the market sector was already in a slump, and it’s hard to determine the bill’s impact.

Big Beautiful Bill Won’t Help AI

Trump’s Big Beautiful Bill is a key piece of legislation that covers a huge range of topics. Intense political controversies caused the bill to change shape many times, but it finally passed the Senate today.

However, Senators overwhelmingly rejected the bill’s language supporting AI, showing a massive rebuke for the entire industry.

The vote was nearly unanimous, signaling real apprehension towards the industry. Indeed, the only Senator who voted for it, Thom Tillis, already announced that he won’t seek re-election.

A lot of cryptoassets are tied to the AI industry, and the market sector has taken some major hits since the bill’s language changed. Market cap and volume are both down over 5%:

So, this leaves us with a few questions. What were the Big Beautiful Bill’s positions on AI? Why did the Senate overwhelmingly reject them? Can we expect the AI token market to continue showing reduced trade volumes and market capitalization?

The bill’s plan, essentially, was to impose a 10-year moratorium on AI regulation for all US states. This may have taken the form of an outright ban or a more roundabout method.

It would have proposed a $500 million fund on AI infrastructure development, but only states with zero AI regulations could access this money. Google and OpenAI supported this plan.

Such a vision would’ve created a lot of problems, and pro-crypto Senators even turned on it. If the bill banned AI regulation for 10 years, states would be powerless to prevent future AI-related crimes.

Obvious offenses include fraud or copyright infringement, but people might even use AI tools to simulate depictions of child abuse, as some Senators warned. This possibility caused prominent Republicans like Marsha Blackburn to disavow the effort.

Unfortunately, it’s difficult to say how the bill will impact the AI token market in the long term. So far, the Big Beautiful Bill has been very unpredictable already.

For example, Elon Musk’s opposition to the bill caused several Musk-related meme coins to flourish, but Dogecoin fell by over 5%. This chaos could create new opportunities, but it’s uncertain where they’ll appear.

Additionally, the AI token sector was already in a slump before the bill passed. These 5% drops are concerning, but AI asset trade volumes fell over 38% in the last 30 days.

Compared to other macroeconomic concerns, these legislative hurdles might not leave a lasting mark on the sector.