TL;DR
- Nvidia Subpoenaed: The U.S. Department of Justice issued a subpoena to Nvidia on September 3, sparking market turmoil and significant losses in AI-related tokens.
- Market Impact: Nvidia’s shares dropped by 8.3% this week, while AI tokens fell by an average of 7.1%, outpacing declines in major cryptocurrencies like Bitcoin and Ethereum.
- Broader Trends: The cryptocurrency market continues to experience volatility, with analysts predicting further downside influenced by macroeconomic factors and recent Federal Reserve rate cuts.
On September 3, the U.S. Department of Justice (DOJ) issued a subpoena to Nvidia, the renowned chipmaker, as part of an investigation into potential antitrust law violations. This development has sent shockwaves through the cryptocurrency market, particularly affecting Nvidia’s stock and the broader AI token sector.
Market Reaction
Following the news, Nvidia’s shares have already dropped by 8.3% this week. The impact has been even more pronounced in the cryptocurrency market, where AI-related tokens have experienced significant losses.
According to CoinMarketCap data, AI tokens fell by an average of 7.1% in the 24 hours after the announcement, outpacing the declines of major cryptocurrencies like Bitcoin and Ethereum, which slumped by 4.3% and 4.4%, respectively.
AI Tokens Hit Hard
The downturn has been particularly severe for tokens associated with blockchain AI agents, which saw an average intraday drop of 11.1%. These agents, which operate autonomously within blockchain infrastructures as traders, miners, validators, or arbitrageurs, have been hit hard by the market’s reaction to the Nvidia news.
Main AI Tokens like Near Protocol (NEAR), Internet Computer (ICP), Artificial Superintelligence Alliance (FET), and Render (RENDER) have managed to weather the storm, reporting gains ranging from less than 1% to nearly 5% in the last 24 hours.
On the other hand, Bittensor (TAO) and Tetha Network (THETA) are among the few tokens reporting losses, ranging from 0.40% to 1% in the same time frame.
Broader Market Trends
The broader cryptocurrency market has been experiencing choppy sideways trading since March when Bitcoin reached its recent all-time high of around $73,700. The recent downturn is seen as part of this ongoing trend.
Analysts from Bitfinex predict further downside in September, with potential retracement to the $45,500 price level, influenced by evolving macroeconomic metrics and recent rate cuts by the Federal Reserve.
The DOJ’s investigation into Nvidia has had a ripple effect across both traditional and cryptocurrency markets. As the situation unfolds, investors will be closely watching for further developments and their potential impact on AI tokens and the broader crypto landscape.
