Nvidia’s Stock Drop Triggers AI Token Market Rout, Wiping Out $8 Billion
Nvidia's stock plunge triggers a massive sell-off in artificial intelligence-tokens, wiping out over $8 billion in market cap. l Credit: Miguel Candela/SOPA Images/LightRocket via Getty Images
Key Takeaways
- The recent Nvidia stock decline had a cascading effect on the broader AI token market.
- The top 10 AI tokens experienced an average price drop of 30% in the past month.
- However, they’re still up on an annual basis.
The recent downturn in the artificial intelligence (AI) token market is a direct consequence of Nvidia’s stock value dip, triggered by stricter US export controls on AI chips to China.
As a critical player in the AI industry, Nvidia’s market cap loss of $660 billion has sent shockwaves through the entire sector, impacting the company and the broader AI token ecosystem. However, the latter’s market cap is still higher than one year ago.
Top 10 AI-Tokens Market Cap Slumps
Nvidia‘s stock value recently took a sharp dive after the US government imposed stricter export controls on AI chips destined for China. This move has sparked significant concerns about the company’s future revenue and growth prospects in one of its key markets.
The impact of these controls has been profound, leading to a staggering $660 billion drop in Nvidia’s market capitalization, as investors worry about the long-term effects on the company’s global operations and its ability to maintain its leadership in the AI industry.
The ripple effects of Nvidia’s stock collapse have been far-reaching, with the top 10 AI tokens also feeling the pinch. According to AltIndex data , these tokens have collectively plummeted by an average of 30% over the past month, wiping out a staggering $8 billion in market capitalization.
AI crypto tokens also bore the brunt of Nvidia’s collapse. According to CoinMarketCap data , the market capitalization of the top 10 AI tokens decreased from $24.1 billion in July to $16.5 billion last week. Losers included NEAR Protocol (37%), Render (33%), DeXe (29%), and Akash Network (27%).
Artificial Superintelligence Alliance Biggest Loser
FET token experienced a volatile year in 2024. It underwent a significant price correction after reaching a new all-time high of $3.45 in March. As of Aug. 21, FET was trading at $0.92, slightly above its yearly opening price.
Technical analysis indicates a potential reversal from a bearish trend. Since the March peak, FET has been trading below a resistance trend line that has held firm on multiple occasions. However, recent price action suggests a possible breakout attempt.
The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) have generated bullish divergences, supporting this bullish outlook. The RSI has risen towards the 50 level, while the MACD has formed a bullish crossover.
A successful breakout could propel FET’s price towards the nearest resistance level of $1.75. Investors should closely monitor price action and technical indicators for confirmation of this breakout.
On Aug. 21, 2024, FET’s market capitalization stood at $2.25 billion, ranking it the 32nd largest cryptocurrency by market cap.
AI-Tokens Are Still Up YoY
While the $8 billion drop in AI token market cap over the past month is significant, current valuations are still far removed from their 2023 highs. A comparison of the top 10 AI tokens by market cap reveals a substantial decline.
Near Protocol, Artificial Intelligence Alliance, Bittensor, Injective, The Graph, and the next five AI tokens had a combined market cap of $5.86 billion in August 2023. This represents an 182% decrease compared to their combined value in the previous week.
Despite the overall market downturn, certain AI tokens have experienced remarkable growth since last August. Artificial Superintelligence Alliance and AIOZ Network stand out with 1,235% and 4,108% increases in market capitalization, respectively. However, the recent price corrections have overshadowed even these impressive gains.
The significant decline in AI token valuations highlights the speculative nature of the market and the potential for rapid price swings.
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