- The crypto market declined this week alongside a significant selloff in the stock market.
- AI tokens took a more significant hit, with most of them losing over 10%.
- Nvidia faces scrutiny by the DoJ over antitrust issues.
The crypto market experienced a downturn this week, mirroring a broader selloff in the stock market. Bitcoin’s price dropped to $55,602 on Wednesday from a Tuesday high of $59,803, while Ethereum fell to $2,307 from a high of $2,553 during the same period.
While major cryptocurrencies like BTC and ETH faced significant declines, AI tokens were hit particularly hard, with many losing over 10% of their value in a short period. Analysts attribute this decline to an ongoing investigation into Nvidia, a leading GPU manufacturer in the AI industry, by the United States Department of Justice (DoJ).
The growth of AI tokens over the past eight months is closely tied to Nvidia’s advancements in AI development. However, the recent DoJ scrutiny has triggered a market reversal, creating fear, uncertainty, and doubt (FUD) in the AI token sector.
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Reports indicate that the DoJ served Nvidia with an antitrust subpoena, causing a $437 billion drop in its market value from the previous week’s earnings. The subpoena is part of an investigation into Nvidia’s competitive practices, particularly regarding potential barriers for customers switching to other AI chip suppliers.
Meanwhile, Nvidia stated on Wednesday that it did not receive a subpoena from the DoJ. The AI chip-making company noted that it had inquired from the DoJ about the reported subpoena. However, the firm promised to answer questions from the regulators about their business. However, a subpoena would intensify the DoJ’s investigation into the matter.
The ongoing situation has significantly affected the AI sector of the crypto market, with top AI tokens experiencing notable declines in the past few days. NEAR, the native token of the NEAR protocol AI solution, dropped 13% in less than two days, falling from a Tuesday high of $4.075 to a Wednesday low of $3.557. Nearly all the AI tokens listed on CoinmarketCap experienced significant losses in their weekly trends, following the growing FUD across the crypto sector.
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