AI-related tokens have seen a sharp decline in June, with some losing as much as 25% of their value. This comes after chip-maker Nvidia’s (NVDA) recent blowout quarter, which had initially caused a short-lived boom in the sector. According to Lewis Harland, portfolio manager at Decentral Park Capital, the sub-sector has lost 16.7% over the past seven days, compared to a 6.9% contraction in the broader crypto market. SingularityNET (AGIX) has lost 19% of its value in the past week, while Fetch.ai (FET) and The Graph (GRT) have both lost almost 25%.
Harland noted that AI tokens such as Render (RNDR) have been more strongly correlated with Nvidia shares, but the U.S. Securities and Exchange Commission’s lawsuits against Binance and Coinbase (COIN) have caused worries in the crypto sector that have yet to affect the AI industry. Despite Nvidia shares gaining about 7% in the past week, the top ten AI tokens by market cap have lost about 14% of their value on average.
Render has been an exception, as it has been “picked up as a key project” and has diverged from other AI-related projects since the start of the second quarter. This is likely due to its connection with Nvidia, as it is focused on GPU-based computing, similar to the chip firm. There was also speculation around Render being used by Apple (AAPL) for its virtual reality headset.
Market trend analyst at AI investment platform Q.ai Jason Mountford believes that AI-related tokens will “continue to struggle for the foreseeable future, barring a major announcement in AI tech more generally,” which could lead to another short-lived boom.