Are AI Crypto Tokens in For a Big Shock?
NOIDA (CoinChapter.com)—AI crypto tokens, including FET, RNDR, GRT, etc., posted notable gains over the past 24 hours as the wider crypto market bounced back. Moreover, the resilience came as Nvidia’s stock experienced a significant drop, driven in part by CEO Jensen Huang’s large-scale stock sale.
The move is surprising since Nvidia seems to be sort of a God to the AI crypto tribe. Hence, even a minor movement in the tech giant’s fortunes often gets emulated multiplefold by the sector. As such, Nvidia shares dropping 14% over three days could set off a bearish chain reaction in the AI crypto tokens.
Nvidia Stock Sales Amid AI-Fueled Growth in 2024
Jensen Huang’s decision to offload Nvidia shares, worth nearly half a billion dollars over the summer, was timely. Executed under a 10b5-1 plan adopted in March 2024, these sales occurred just before Nvidia’s shares declined by 14% due to a mix of broader market forces and specific challenges, including delays in Nvidia’s next-generation AI chips.
The timing of these sales highlights an acute awareness of market conditions and potential downturns. Moreover, since the beginning of 2020, Jensen Huang has sold approximately $1.4 billion in Nvidia stock. The sales have been ongoing, with Huang continuing to offload shares through August 2024.
Nvidia’s rise in 2024 largely depended on the growth in the AI sector, as the chip manufacturer’s products became vital for the sector’s growth. The resulting demand pumped NVDA prices to rise more than 195% since Jan. 2 earlier this year to reach an ATH near $140 on June 20.
However, NVDA prices have been in a downtrend since June. The Nvidia founder’s revelation of his sales raises the question of whether the dumping was somehow responsible for the price correction of NVDA shares.
In July 2024, Jensen Huang sold a record $322.7 million worth of Nvidia shares. This was part of a broader pattern, with a total of nearly $500 million sold during the summer. These transactions were executed under a 10b5-1 trading plan established in March, preceding a significant tech stock selloff.
AI Crypto Tokens Decouple From Nvidia… For A While
Meanwhile, AI crypto tokens seem to have decoupled from the traditional tech sector’s troubles, at least for a while.
Various factors could have caused the divergence, including unique investor sentiment toward digital assets, independent growth drivers within the AI sector, and speculative trading activities capitalizing on perceived undervaluations.
Despite NVDA shares recording a 2% growth on Aug. 2, RNDR, GRT, and NEAR prices faced immense bearish pressure due to the wider crypto market crash. However, the recent growth in the AI crypto tokens coincides with a spike in NVDA prices on Aug. 6.
Yet, it might be possible that investors are betting on the continued growth and relevance of AI technologies, which underpin many of these cryptocurrencies, regardless of temporary setbacks in hardware-related sectors like Nvidia’s.
However, the recovering correlation between NVDA and AI crypto tokens could be worrying, especially if the tech giant’s share prices plummet. The crypto assets, already under pressure from the recent market crash and FUD among investors, might nosedive in response.
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