AI tokens hit by market sell-off but fare better than most
Crypto prices fell an average of 6.5% on January 27 due to a sell-off in risk assets triggered by concerns over AI profitability following the release of a Chinese AI model. AI-related tokens declined less, averaging 5.4%, with AIOZ Network, Render, and Arweave experiencing the worst drops at 10.2%, 9.3%, and 9.4%, respectively. Bittensor saw a 5.6% increase. Nvidia and other AI stocks dropped after news about DeepSeek's AI model, which can compete with high-end models like ChatGPT on cheaper hardware. Memecoins and real-world assets fell 4.9% and 5.3%, while smart contract platforms like Solana and Sui declined about 5.3%. Bitcoin and Ethereum lost 3% and 4.9%, respectively. Liquid staking tokens faced an 11% correction, the worst among categories. Analysts view the sell-off as a necessary profit-taking phase, with a bullish outlook for AI stocks pending upcoming earnings reports. This correction may present buying opportunities for investors in higher-beta tokens like Solana.
