Internet Computer (ICP) and NEAR Protocol experienced significant price declines, leading a broader downturn among AI-focused cryptocurrencies following negative market sentiment triggered by a sharp drop in Nvidia’s stock price. The market turbulence began after Japanese conglomerate SoftBank Group revealed it had sold its entire $5.8 billion stake in Nvidia, an announcement that sent ripples across both traditional and digital asset markets.
As of Tuesday’s market close, ICP had dropped approximately 8%, while NEAR declined by around 6.5%. These losses stood out even amid a general crypto market contraction, where the overall market capitalization slipped by about 2%. However, AI-related tokens bore the brunt of the selloff, with the category seeing an average decline of 7%. Alongside Internet Computer and NEAR, other notable AI-centric projects including Bittensor (TAO), Render (RNDR), and The Graph (GRT) also traded lower.
The downturn followed a broader risk-off sentiment that took hold after Nvidia’s stock fell. SoftBank’s divestment raised investor concerns about the sustainability of the current AI investment boom. While SoftBank did not offer detailed reasoning behind the sale, the move was widely interpreted as a signal that valuations in the AI sector may have peaked, at least in the short term. This perception was magnified by ongoing discussions on Wall Street about the possibility of an AI-driven asset bubble.
The impact wasn’t limited to cryptocurrencies. AI-related equities and crypto mining firms also suffered. CoreWeave, a cloud computing provider with a strong focus on AI workloads, saw its stock plummet by more than 16%, closing the day at $88.39. This cross-sector retreat underscores the high correlation between AI narratives in both the traditional and digital asset spaces.
Despite broader market challenges, some macroeconomic developments offered temporary relief. Positive news regarding the end of the U.S. federal government shutdown and promises of potential financial relief for American citizens contributed to a short-lived rally in equities and digital assets. Bitcoin briefly surged above $107,000 before retreating back beneath the $102,000 level as profit-taking set in.
The recent pullback in AI tokens like ICP and NEAR follows a period of strong gains. Over the past few months, both tokens had benefited from renewed investor interest in projects with AI integration or infrastructure potential. However, the latest volatility suggests that these assets may now be entering a consolidation phase, with traders eyeing key support levels for potential reentry points.
Looking ahead, the sustainability of AI-focused crypto projects will likely depend on more than just hype and market narratives. Investors are increasingly seeking concrete use cases and revenue-generating models. For Internet Computer and NEAR, this could mean demonstrating real-world AI applications or partnerships that go beyond speculative trading.
Moreover, the intersection between AI and blockchain continues to evolve. Projects like The Graph are working on decentralized indexing for AI-generated data, while Render focuses on distributed GPU rendering for AI workloads. Bittensor is building a decentralized network for machine learning models, aiming to democratize access to AI resources. These initiatives highlight the diverse directions in which the AI-crypto synergy could grow, but also the need for patience as these technologies mature.
The recent selloff may also prompt institutional investors to reassess their positions in high-volatility sectors. If key players like SoftBank are pulling back from AI-related equities, similar caution could extend to their crypto holdings, especially in assets that lack strong fundamentals or clear monetization pathways.
At the same time, long-term bullish investors may view this correction as a healthy reset. Historically, periods of excessive enthusiasm are often followed by price corrections that flush out speculation and lay the groundwork for more sustainable growth. If AI continues to shape the next phase of technological innovation, then blockchain projects that integrate it meaningfully could still thrive in the years ahead.
As the dust settles, market participants should watch for signals of stabilization, such as a return to previous support zones or renewed institutional interest. Until then, caution remains warranted, especially in niche sectors like AI crypto that are particularly sensitive to shifts in broader tech sentiment.
In summary, the sharp declines in ICP and NEAR highlight the fragile balance between innovation and speculation in the rapidly evolving world of AI-driven cryptocurrencies. While recent developments have dented market confidence, they also serve as a reminder that long-term success in this space will depend on execution, utility, and real-world adoption.