Crypto: AI tokens plunge by almost 5 billion in 3 days!

The euphoria surrounding the artificial intelligence (AI) token sector took a major hit this October, with a loss of $4.69 billion in just three days. While investors expected a recovery traditionally associated with this month, it was a declining market that marked the start of this quarter. This sudden volatility, which affects a sector often perceived as bringing revolutionary innovations, is intriguing.

A declining chart depicting AI tokens in a rapid decline. In the background, a dark sky symbolizing market uncertainty. On the side, cascading chips, with visible numbers illustrating significant financial losses. The overall atmosphere should reflect subtle tension and unpredictable volatility, without being overly dramatic.

The sudden fall of AI tokens: a market in decline

The market for tokens linked to Artificial Intelligence and big data experienced a fall in early October, with a loss of $4.69 billion in capitalization in just three days. Indeed, on September 30, 2024, the capitalization of this sector amounted to $38.82 billion, but it plunged to $34.13 billion on October 3. This decline was marked by significant falls in major tokens like Near Protocol (NEAR), which lost 14.88% in one week, or Internet Computer (ICP), which fell by 13.35%. According to data from CoinMarketCap, these figures raise questions about the short-term viability of the AI-related crypto sector.

Besides NEAR, other tokens were also hit by this slowdown, including Bitensor (TAO), which fell by 9.37%, and Render (RNDR), which fell by 13.64%. These losses occur in a generally difficult context for the entire crypto market, marked by geopolitical uncertainties, increased regulations and macroeconomic concerns. October performances particularly disappointas many hoped for a recovery after the difficulties of the summer. But, as is often the case in the world of cryptos, nothing is ever set in stone, and reversals of the situation remain possible.

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External factors intensify the downtrend

Beyond the usual fluctuations of the crypto market, this rout of AI tokens is amplified by major external factors. Geopolitical uncertainties, such as the ongoing conflict in the Middle East, have increased investor distrust, leading some to withdraw from riskier markets like crypto. Additionally, global economic challenges, combined with increasing pressure from regulators on the crypto sector, contributed to this massive sell-off. These external tensions have played a key role in the rapid decline of AI tokens, even as the sector's technological fundamentals remain strong.

Despite this severe correction, it is worth remembering that the AI ​​token market has seen significant growth over the past three months. In July, the capitalization of this sector was around $20 billion, which means that, despite the current fall, the market has still grown by more than $13 billion since this summer. This sudden decline could be interpreted as a simple correction after a period of strong expansion. However, the near-term outlook remains uncertain, with volatility likely to persist through the end of the year.

Current events demonstrate the fragility of a market that is still young and subject to complex dynamics. If the October correction marks a halt for AI tokens, it does not seal their fate. The ever-changing crypto market could well hold surprises, and AI tokens, despite this turbulence, retain long-term development potential.

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