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While Nvidia’s (NVDA) share price surged over 7% on May 28, AI tokens have dropped over the previous 24 hours; still, the fall won’t endure indefinitely, said a crypto trader.
Trader Matthew Hyland noted in a May 28 X post, “NVDA is surging; AI coins are quiet now, but don’t expect that to last.”
Nvidia’s Influence on AI Crypto Tokens
Artificial intelligence companies are running their AI models on Nvidia-made computer processors. With NVDA’s performance as a barometer of the market’s AI attitude, crypto traders view the stock price as a prediction of how AI tokens may move.
According to Google Finance, Nvidia has gained 22% over the previous five trading days to end May 28 at a record high of $1,140; the stock has had a year-to-date rise of around 137%.
With an 18% increase from Q4 2023 and a 262% increase from the year-ago quarter, Nvidia’s first-quarter revenue exceeded expert projections by around 5.6%.
Several of the biggest AI cryptocurrencies by market capitalization, meanwhile, have dropped during the past week instead of following Nvidia.
Based on CoinMarketCap, Render (RNDR), fetch.ai (FET), and SingularityNet (AGIX) lost 8.14%, 11.39%, and 11.19% over the previous seven days, respectively.
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Though AI crypto tokens are not following the increase, some traders think this may change amid the declining stock price of Nvidia.
“The moment NVDA starts to sell off, it will take all the other mega-cap tech names with it, at least for a couple of days,” anonymous crypto trader Triplexx said in a May 28 post. “Then whatever the attitude of crypto is, it will draw crypto with it no matter what. Get ready.”
Investment guru Lyn Alden pointed out on May 25 that among the few equities that have outperformed Bitcoin over the previous ten years is Nvidia.
According to trading site The Kobeissi Letter, a $10,000 investment in Nvidia in 1999 was “worth $25.3 million” as of May 24, one day earlier.
Over the next decade, the larger crypto community feels Nvidia won’t produce the same profits as Bitcoin.
Swan Bitcoin CEO Cory Klippsten said, “There is a near-zero chance of Nvidia outperforming Bitcoin over the next 10 years.”