- AI crypto market cap plunged 9.3% in the past month 24, now at $44.82 billion.
- DeepSeek’s low-cost AI model challenges established AI projects, fueling market doubts.
- FET, Virtual Protocol, and Render show slight daily gains but remain deep in weekly and monthly losses.
The AI cryptocurrency market has taken a hit, losing 9.3% of its value in the past month. It now stands at $44.82 billion, as investors react to the emergence of DeepSeek, a more affordable AI model from the Chinese market. The downturn has affected major AI-focused tokens, with RENDER, Virtual Protocol, FET, and INJ suffering heavy losses over the past week.
DeepSeek’s Arrival Shakes Things Up
DeepSeek, developed by High-Flyer, a Chinese quant trading firm, has challenged AI industry giants with its low development cost of just $6 million.
This is a stark contrast to the billions spent by OpenAI and Meta on large-scale AI models. Naturally, this raises concerns about the long-term sustainability of current AI projects.
Major AI Cryptos Struggle Despite Daily Gains
Some AI cryptocurrencies attempted a short-term rebound but remain in a downward trend over weekly and monthly time frames. FET is currently trading at $1.05, showing a minimal 1.5% rise in the past day. However, it’s down 15.6% over the past week and 17% over the past month.
Related: AI Tokens Trail Past Cycles: Can Bitcoin’s Surge Help?
Meanwhile, Virtual Protocol has yet to recover, gaining a paltry 0.7% in the last 24 hours to reach $2.00, but it has remained down 24.9% for the week and 50.9% over the past month.
On the bright side, it still boasts an impressive 3,986% year-to-date growth, making it one of the top-performing tokens in the period.
Render shows a positive sign of recovery as it boasts a 3.0% daily gain to trade at $5.90. Still, its price is well off the mark in the past week, having dropped by 17.8% and 12.6% in the past month.
Despite these minor price recoveries, with the AI crypto market cap rising by 1.2% over the last day, AI tokens continue to face downward pressure as investors reassess their viability in light of DeepSeek’s emergence.
Related: DeepSeek-R1 Brings Affordable AI to Crypto Startups
AI Stocks Also Feel the Pinch
The impact of DeepSeek isn’t limited to cryptocurrencies. Shares of major AI companies, including NVIDIA, Microsoft, and Meta, also declined in pre-market trading.
NVIDIA saw an 11.46% drop on January 27. The stock has fallen 15.91% in the past five days, currently at $124.65. This reflects broader concerns about the AI industry’s future profitability.
With scrutiny growing over costs and revenue growth, investors are becoming skeptical about whether AI-related crypto projects can deliver long-term value.
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