In the last three days, the crypto market cap of AI tokens has decreased by 12%, going from 38.8 billion dollars to $34.1.
This is therefore a drop of more than 4 billion dollars, equivalent for example to the market capitalization of Litecoin.
It must be noted, however, that market capitalization is a purely theoretical figure, calculated simply by multiplying the number of tokens in circulation (the so-called circulating supply) by the price of a single token.
The decline of AI crypto tokens
The reference crypto token regarding AI is Artificial Superintelligence Alliance (ASI, ex FET), the one born from the merger of Fetch.ai, SingularityNet, and Ocean Protocol.
During 2024, FET managed to reach its all-time highs in March, when it approached $3.5.
At this moment, after the merger, it has even dropped to -60% from the highs of just over six months ago.
To tell the truth, in June it had dropped even lower, below $0.8, but in August it had risen above $1.3, after the merger.
Indeed, in the second half of September, it had managed to climb back above $1.7, but starting from Saturday the 28th, it began to fall again.
The decline of the last few days has nevertheless brought it just below $1.4, which is still at a higher level compared to the August peak post-fusion.
The situation therefore does not seem serious, at least for now, although the $3.5 of March are still very far away.
Artificial Intelligence (AI) in the Stock Market
It is advisable to make a comparison with the stock market trend of the reference stock for the AI sector, namely Nvidia.
The all-time high of the NVDA stock price was reached this year, but in June, above $140.
Since then, it first dropped below $120, already at the end of June, and then on August 5th, it also dropped to $90.
However, that was just a case, because since then it has never dropped below 95, for now.
In fact, in mid-August it had managed to climb back up to $130, only to return to $100 at the beginning of September.
After this up and down, which lasted less than three months, it seems that a phase of lateralization has begun, still ongoing, with the price oscillating between $113 and $127.
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The comparison
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Comparing the price trend of FET/ASI in 2024 with that of NVDA, it is noted that there are significant differences.
First of all, the NVDA stock increased with a relatively continuous and steady rise until June, while FET had a single rapid and substantial rise between February and March.
Furthermore, the decline of FET started a month and a half after that of NVDA, even though both ended on August 6.
In the last two months, NVDA has finally moved sideways, while FET has grown, although this is most likely due to the rebound following the crash, given that from the highs until August 5th, NVDA lost 35%, while FET even lost 80%.
For the rest, the two trends are similar.
The other crypto tokens linked to AI have shown similar performance.
The crypto tokens linked to AI
It should be remembered, however, that while stock titles like Nvidia’s are closely and genuinely linked to the development of artificial intelligence, this connection for crypto tokens is more tenuous.
Artificial intelligence is made of hardware and software, and no crypto token is tied to the development of these two things.
Nvidia, for example, produces chips for artificial intelligence, while generally AI crypto tokens are linked, for example, to software exchange platforms that leverage artificial intelligence, and not to companies that develop them.
This means that even if the medium/long-term trend of stocks like NVDA may not have been affected by the halt in growth following the all-time highs, the trend of AI crypto tokens might struggle to recover the highs. In fact, it is possible that the March highs were due to a speculative bubble, rather than to genuinely strong and promising performances in the artificial intelligence sector.
Among other things, if we take the beginning of 2023 as a reference, the Nvidia stock to reach the highs of 2024 made a +870%, while FET recorded an incredible +3,800% in just over 14 months.
Furthermore, comparing the current price level with that of January 1, 2023, NVDA is still at +720%, while FET has dropped to +1,200%. This suggests not only that there was a real speculative bubble on FET, but that perhaps it hasn’t even completely burst yet.
