Virtual Protocol, an AI agent-based platform, is currently facing significant challenges, with its revenue and user activity plummeting by over 90%. The platform’s native token, VIRTUAL, has similarly experienced a dramatic decline in value, leading many to wonder if the project can recover or if it is heading toward further losses.

Sharp Decline in Revenue and User Activity

Virtual Protocol has experienced a severe downturn in both its revenue and user engagement. According to Dune Analytics, trading revenue for the protocol hit a peak of $976K in mid-January but has since crashed to just $13K. This represents an alarming 98% decline in just two months, signaling a lack of demand for the platform’s services.

User activity has followed a similar path. The number of daily AI agents created on the platform, which spiked to 1,365 in November 2024, has dwindled to fewer than 10 per day as of March 2025—a staggering 99% drop. This sharp decline in both revenue and user activity raises concerns about the platform’s viability, especially considering that the AI agent market, once thought to be a major growth sector, has lost much of its luster.

VIRTUAL Token Suffers Significant Losses

The token associated with Virtual Protocol, VIRTUAL, has also taken a hit. After peaking at $5.10 in early January 2025, VIRTUAL has seen a nearly 90% drop, now trading at just $0.56. This decline mirrors the broader market sentiment surrounding Virtual Protocol, which has struggled to maintain investor interest.

The drop in VIRTUAL’s price is part of a larger trend in the AI agent market. Data from Flipside shows that the weekly trading volume of AI agent tokens dropped from nearly $2.5 billion in December 2024 to just $54 million by early March 2025. This massive decline in trading volume further underscores the fading interest in AI agents and highlights the struggles facing Virtual Protocol as it grapples with falling demand.

Strategic Diversification into Wrapped Bitcoin

Despite these challenges, there is some hope for Virtual Protocol. Blockworks research analyst Dan Smith pointed out that the Virtual Protocol team made a smart decision by diversifying its revenue into wrapped Bitcoin (cbBTC). The platform now holds $12.1 million worth of cbBTC, which provides a financial cushion and extends its runway. This move gives Virtual Protocol the ability to continue iterating on its product even while its native token struggles.

Smith’s analysis suggests that this diversification could help Virtual Protocol weather the current storm, but the platform’s future still hinges on whether it can regain interest from investors and users.

Can Virtual Protocol Recover?

The question remains whether Virtual Protocol can recover from this downturn. The broader market sentiment is bearish, and the AI agent sector’s appeal appears to be waning. For Virtual Protocol to bounce back, there would need to be a resurgence in demand for AI agents, as well as a shift in market sentiment.

A potential short-term rally could occur if liquidity pockets at $0.8 and $0.6 are tapped, as shown on the liquidation heatmap. Historically, prices have tended to gravitate toward these levels of high liquidity, which could give VIRTUAL a temporary boost.

Conclusion

Virtual Protocol’s future is uncertain, with both its revenue and user activity experiencing sharp declines. The 90% drop in the price of VIRTUAL token highlights the growing disinterest in the platform. However, the team’s strategic diversification into wrapped Bitcoin may provide the financial stability needed for the platform to continue its development. If the broader market sentiment shifts and interest in AI agents picks up again, there may be a chance for Virtual Protocol to recover. But for now, the project faces significant challenges in regaining its former momentum.