AI Crypto Tokens Swoon as Nvidia Reaches a New All-Time High

I’ve always been interested in, but also skeptical about, the idea of decentralized AI. I support the mission behind projects such as Bittensor and the Artificial Superintelligence Alliance, which is to match the performance of LLMs like ChatGPT or Claude without the concerns about privacy and centralization. But with the hundreds of billions of dollars being invested in these centralized platforms, I’ve wondered how they could compete.

Over the past couple of years their token performances outstripped actual usage as investors looked for any way to get exposure to the sector. But now, after a turbulent spring, stocks exposed to the sector are surging while the tokens are getting left behind.

I wanted to investigate whether this is just a temporary blip or a sign of more pain to come.

AI Crypto Tokens Swoon as Nvidia Reaches a New All-Time High

Tokens such as TAO and FET are supposed to be crypto’s answer to centralized behemoths like OpenAI. But as AI stocks recover from a turbulent spring, crypto tokens are falling.

GPU manufacturer Nvidia (NVDA) reached a new all-time high on Thursday morning of $155.45 after brushing off a difficult start to 2025: its stock dropped 37.6% from $149.43 on Jan. 6 to $93.31 on April 4.

During that period the stock had to deal with a massive sell-off caused by a low-cost Chinese competitor called DeepSeek and then President Trump’s ‘Liberation Day’ tariff regime, which caused a global economic panic and threatened the company’s ability to sell its GPUs into China.

But that is old news now, as Jensen Huang, chief executive officer of the world’s most valuable company, gave a bullish outlook for the company at Nvidia’s annual shareholder meeting yesterday. “We have many growth opportunities across our company, with AI and robotics the two largest, representing a multitrillion-dollar growth opportunity,” said Huang.

This bullish outlook is creating a halo effect for the entire industry, as Nvidia and the entire Philadelphia Semiconductor Index (a useful proxy for the AI industry) are both up close to 20% in the last month. 

Despite this hoopla, crypto AI tokens are not coming along for the ride. The five largest AI crypto tokens in terms of market capitalization, Bittensor (TAO), Fetch.ai (FET), Near (NEAR), Render (RNDR), and Worldcoin (WLD), are all down more than 20% over the same period of time.

A Permanent AI Split?

For some observers these trends are a result of AI tokens trading far beyond their fair value amid the hype last year. “Remember last year you had Bittensor and all of these different AI tokens that were very expensive. Now they've all crashed to Earth and NVIDIA's at an all-time high. It's not as if crypto is just simply a high beta on equities,” said Ram Ahluwalia, chief executive officer of Lumida Wealth. “We're [also] not really seeing product-market fit. We're seeing stories and visions and not real revenue generation. That's the issue.”

But others feel that this divergent trend is not permanent, while acknowledging the gloomy month for the sector. “The AI trade is definitely back in U.S. equity markets, but in crypto markets it definitely is not,” said Zach Pandl, head of research at Grayscale Investments. 

However, Pandl argues that one big reason for the separation between asset classes is structural. “I think this speaks to the availability of capital in equity markets more so than the fundamentals of the projects in decentralized AI,” said Pandl. 

And he still thinks that the story is far from being written when it comes to decentralized AI. “We think that there's lots of growth in this space, improving fundamentals and early signs of network effects accruing to specific projects like Bittensor,” Pandl told Unchained. “In our estimate, the category is worth about $15 billion [based on Grayscale’s classification], which is less than 1% of Bitcoin's (BTC) market cap and we think speaks to the potential upside of the decentralized AI market segment.”

More Pain for Interactive Strength

This development could not have come at a worse time for Interactive Strength (TRNR), which announced a headline-grabbing move on June 11 — a “$500 million facility to acquire AI-focused FET tokens,” according to a press release, to become the first crypto treasury company in the sector.

Since that date, FET has been down 19.18%, while TRNR has fallen 53.37%.

Chart of the Week: Bitcoin Dominance

Surging on the back of growing demand for bitcoin treasury companies, Bitcoin ($2.13 trillion) now comprises 65.91% of the total crypto market capitalization ($3.39 trillion). 

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