Market Update: Crypto Prices Decline Amid AI Model Concerns
On January 27, cryptocurrency prices experienced a 6.5% average decline due to a major sell-off in risk assets triggered by concerns surrounding a Chinese artificial intelligence (AI) model.
AI Tokens Performance
- AI-related tokens saw a slightly lower average decline of 5.4%.
- Worst daily performances were observed in AIOZ Network (AIOZ), Render (RENDER), and Arweave (AR) with declines of 10.2%, 9.3%, and 9.4%, respectively.
- Bittensor (TAO) managed to increase by 5.6% over the past 24 hours.
Impact on AI Companies
Following the news about the Chinese startup DeepSeek’s latest AI model, stocks of companies like Nvidia and others experienced a slump. The new model was noted for its high performance while running on more affordable hardware compared to existing large language models.
Market Trends
- Memecoins and real-world assets (RWA) experienced relatively softer declines.
- Bitcoin (BTC) and Ethereum (ETH) also suffered losses below the market average.
- Smart contract platforms like Solana (SOL) and Sui (SUI) saw a decline of roughly 5.3% each.
Opportunity for Investors
Aurelie Barthere, a principal research analyst, mentioned that the recent sell-off in risk assets could offer an opportunity for investors to enter the market, especially in higher-beta crypto tokens like SOL. This correction presents a chance for those who missed out on previous opportunities.
Expert Insights
“For AI stocks, the outlook remains bullish for now, highlighted by TSMC’s recent upbeat guidance. However, this optimism must be reinforced by upcoming earnings reports from Nvidia, ASML, and Big Tech in the next few weeks, which will need to beat expectations to sustain the momentum.”