Major artificial intelligence-related cryptocurrencies plummeted following the release of Nvidia’s second-quarter 2024 results, which beat estimates but failed to impress investors.
Artificial Superintelligence Alliance (FET) fell about 7.8% to $1.1663 just hours after Nvidia released its earnings results. Bittensor (TAO) fell 4.5% to $295.22 and Render (RNDR) fell 6.8% to $5.47, according to data from CoinMarketCap.
Although Nvidia reported revenue of $30 billion in the second quarter of 2024, up 15% from the first quarter and about $1.32 billion above previous estimates, that doesn’t seem to be enough.
“Better than expected is not enough for Nvidia. Clearly investors expect this company to exceed all expectations,” market commentator Lisa Abramowicz wrote in an August 28 X-post following Nvidia’s announcement.
Some analysts even predicted that Wall Street estimates would be exceeded by at least 10%.
Nvidia (NVDA) stock closed the trading day on August 28 at $125.61 and has since fallen another 6.89 percent to $116.95 in after-hours trading, according to data from Google Finance.
The performance of the AI crypto tokens was closely linked to Nvidia’s performance and earnings reports in previous quarters.
Some crypto market participants had predicted in advance that the market for AI crypto tokens would stumble after the earnings release.
On August 23, an X user named “Shogun” wrote: “You may be able to make profits by staying long until the day before, but I bet you’re better off staying short afterward to catch the dump.”
Nvidia makes chips that companies use to train and deploy AI models. After releasing its first-quarter results in May, AI crypto tokens also plunged, despite first-quarter revenue increasing 18% from the fourth quarter of 2023.
“The very high estimates were indeed very high,” Bloomberg’s Ed Ludlow said on August 28, but he does not believe that Nvidia’s business is slowing down.
“The story is still intact. There is no demand problem here. Basically, the cloud computing providers, the hyperscalers we call them, who run data centers, continue to spend money on Nvidia’s products,” he explained.
This comes after the market capitalization of AI and big data crypto projects and tokens rose 79.7% in the three weeks following “Crypto Black Monday” on August 5, when Bitcoin (BTC) fell below $50,000 for the first time since February.
Around this time, the total market capitalization of AI and big data crypto projects reached a yearly low of $18.21 billion.
This article does not contain investment advice or a recommendation. Every investment and trading decision involves risk and readers should conduct their own research in making their decision.
