The cryptocurrency sector linked to artificial intelligence (AI) experienced a significant downturn immediately following Nvidia’s earnings announcement for the second quarter of 2024. Despite Nvidia surpassing financial projections, these specialized tokens did not fare well.
Nvidia, known for pioneering GPU technology, which propels advancements in sectors like AI and gaming, reported a 15% quarterly increase in revenue, reaching $30 billion. This figure exceeded expectations by about $1.32 billion. However, this achievement did not meet the high expectations market watchers and investors set.
Artificial Superintelligence Alliance (FET) saw its value drop by 6%, landing at $1.20 shortly after publicizing the earnings. Similarly, Bittensor (TAO) and Render (RENDER) each fell by 6%, to $294 and $5.59, respectively. These declines reflect a broader trend in which the performance of AI-centric cryptocurrencies often mirrors Nvidia’s financial health.
Nvidia GTC 2024 Highlights and AI Token Performance: GRT, OCEAN LeadLisa Abramowicz, a market analyst, expressed a common sentiment in her X post dated August 28. She noted that exceeding forecasts is insufficient for Nvidia as investors have come to expect extraordinary performance surpasses from the tech giant. Following the closing of trading on August 28, Nvidia’s shares dropped nearly 7% in after-hours trading, indicating investor dissatisfaction.
This pattern of AI-related cryptos slipping post-Nvidia earnings isn’t new. Similar trends were observed after their first-quarter report earlier in May, where AI tokens struggled despite an 18% increase from the previous quarter.
Ed Ludlow of Bloomberg commented on the situation, emphasizing that Nvidia’s business prospects remain strong without any signs of slowing demand. He highlighted continued investments in Nvidia products by major cloud computing and data center operators, underscoring a robust business model.
The fluctuations in AI and big data crypto markets are notable, especially considering their 79.7% surge in market capitalization three weeks after the market downturn on August 5, known as “Crypto Black Monday.” During this period, Bitcoin fell below $50,000 for the first time since February, and the market cap for these AI and big data projects hit a yearly low of $18.21 billion.
These market movements underscore the volatile nature of cryptocurrencies tied to technological sectors and their sensitivity to broader economic indicators and specific company performances such as Nvidia’s.
