AI tokens outperform top 50 cryptos despite Nvidia’s volatile week

In this post:

  • Artificial intelligence-related crypto projects have drawn massive interests from crypto traders during the past day.
  • Fetch.AI, an AI-focused project, emerged as one of the top gainers, outperforming the top 50 crypto asset by market capitalization during the reporting period.
  • This improved sector performance comes at a time when Nvidia’s NVDA shares are struggling.

Investors have been betting on crypto artificial intelligence (AI) tokens the past day despite Nvidia’s stock price struggles. According to Coingecko data, Fetch AI, an AI-focused crypto project, outperformed the top 50 cryptocurrencies by market capitalization in the past 24 hours, rising by almost 30% during the reporting period.

Also Read: AI to drive financial industry profits to $2 trillion by 2028

FET’s impressive performance mirrors positive trends in the AI sector. Other top projects like SingularityNET’s AGIX, Ocean Protocol’s OCEAN, and Render’s RNDR also recorded double-digit gains. This sector-wide growth is notable, particularly amid Nvidia’s recent decline from its position as the most valuable company in the world.

Why AI tokens rallied

Analysts at the Bitget exchange told Cryptopolitan that traders in the AI sector increased by 30% over the past 24 hours. The exchange pointed out that the industry drew massive interest from investors and could be a precursor to a potential AI token rally. They stated:

“The prolonged consolidation period for both Bitcoin and the AI sector, usually leads to significant price expansions. The period before the bull run usually marks the best time to stock up on investments before the anticipated rally. Some investors who fixed their positions before the recent market fall are reinvesting capital into technological projects, which can set the market vector in 2024.”

The analyst also noted that the impending merger of Fetch.ai with SingularityNET and Ocean Protocol to create a unified Artificial Super Intelligence platform with the ASI token was also drawing massive investor interest. The three decentralized AI projects are set to complete their merger by July 15, and several top crypto trading platforms like Binance and Crypto.com have already expressed readiness to support the move.

Furthermore, interest in the sector was piqued after speculations emerged about a potential collaboration between Injective Protocol and Fetch.AI. On June 24, Injective posted a teaser image featuring both platforms’ logos connected by an energy flow, with the caption, “Something is brewing…” However, no further details were provided.

The crypto community quickly speculated on the nature of this collaboration, with some suggesting a merger. In contrast, others noted each platform’s unique strengths that could lead to a powerful partnership. Fetch.ai is a blockchain platform for building AI agents that can perform everyday tasks through interconnected data and permissionless protocols. Conversely, Injective is a layer-1 blockchain designed for decentralized finance (DeFi), hosting several DeFi applications.

AI tokens unmoved by NVDA volatility

The performance of the AI tokens in the past week has notably diverged from that of Nvidia’s stock. Nvidia, recently crowned the most valuable company in the world, experienced a sharp price correction that erased around $500 billion from its market cap in just three days.

Also Read: Bitcoin miners may foray into AI training farms without abandoning mining

This decline occurred amid concerns over significant share sell-offs by top executives, including President Jensen Huang. Financial research firm Barchart reported that Nvidia insiders have sold over $796 million in shares this year.

Nvidia Shares
Nvidia Shares Insiders’ Selling (Source: Barchart)

Meanwhile, its share price decline proved advantageous for short sellers, who reaped record profits. Data indicates that short sellers of Nvidia gained $4.97 billion during this period, with $2.40 billion earned on Monday alone—the highest one-day gain since 2019.

Nvidia is already bouncing back despite this downturn, rising nearly 6% today and poised to challenge new highs, according to Google Finance data. This resurgence mirrors the trend in AI tokens, whose market cap has surged by 10% today, reaching $29.74 billion.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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