AI Crypto Tokens Plunge as DOJ Investigates Nvidia
AI crypto tokens dropped sharply after the US DOJ subpoenaed Nvidia, sparking concerns over antitrust violations and investor uncertainty in the AI market.
The market for AI crypto tokens has been rocked by a significant downturn, with the total market cap falling to $20 billion. This decline comes in the wake of a US Department of Justice (DOJ) subpoena to Nvidia over concerns of antitrust violations. The sudden drop highlights growing investor anxiety around the future of artificial intelligence investments, especially those tied to major tech companies like Nvidia.
Nvidia Subpoena Shakes AI Crypto Market
On Tuesday, the DOJ issued subpoenas to Nvidia and other tech firms as part of an investigation into possible antitrust violations. The investigation is looking into whether Nvidia has been unfairly limiting competition by restricting buyers from switching to other suppliers and penalizing companies that do not rely solely on its AI chips. This legal scrutiny has sent ripples through the broader tech market, particularly impacting assets tied to AI.
Nvidia’s shares, already dealing with losses earlier in the week, took another hit following the news of the subpoenas. As one of the most influential companies in the AI sector, any trouble for Nvidia spells trouble for AI-related assets. The result? The total market capitalization of AI crypto tokens fell by 7.6%, reflecting broader concerns about the stability of AI investments under the shadow of the DOJ investigation.
AI Tokens Experience Significant Declines
The impact of the DOJ investigation has been most acutely felt in the AI crypto token market. Several major AI-related cryptocurrencies, including NEAR Protocol (NEAR), Internet Computer (ICP), and Injective (INJ), saw notable drops in value. The hardest hit, however, was Bittensor (TAO), which recorded an 11% decline following the news about Nvidia.
The sudden downturn in AI crypto tokens is particularly concerning because the sector has experienced significant growth over the past year. Nvidia’s rise as a leader in AI technology had been a major driver of this growth. But with the DOJ now investigating the tech giant, the once-buoyant AI crypto market faces uncertainty.
TAO Price Outlook: Signs of Recovery Amid Volatility
Despite the sharp drop in TAO’s value, there are signs that the token may not be down for long. While it experienced an 11% drop, it has already started to recover slightly, trimming the overall loss. The token is still trading within an ascending triangle pattern, a technical indicator that suggests potential for a breakout.
If TAO can break through key resistance levels, it could see a significant price recovery, with analysts predicting a possible 43% surge. However, this optimistic scenario depends on the token’s ability to flip a critical resistance level into support. Should TAO fail to do so, it could face further losses, with the risk of slipping to a lower price range, invalidating the bullish outlook and signaling continued volatility in the altcoin market.
In conclusion, while the AI crypto token market has taken a hit due to the DOJ's investigation into Nvidia, there is still hope for a recovery, particularly for tokens like Bittensor (TAO) that are showing potential in technical analysis. However, much will depend on how Nvidia's legal issues unfold and how the market reacts to further developments.
