October proved challenging for AI‑focused cryptocurrencies, as concerns over high AI spending, rising indebtedness and uncertain returns triggered a sell‑off in AI‑related equities that spilled over into the crypto sector.
Market impact in October
The leading AI stock, Nvidia, fell more than 10% during the month, marking its steepest monthly decline since a prior market correction. This decline coincided with a 16% drop in the market capitalisation of AI‑linked crypto assets, as measured by CoinPaprika, which fell from $16.32 billion on 3 October to $13.72 billion on 31 October.
NEAR Protocol, the largest AI‑associated cryptocurrency by market cap, lost over 16% of its value, erasing roughly $200 million in market capitalisation and wiping out nearly half of its 178% rally in September.
Broader equity weakness
Weak earnings from major technology firms added pressure. On 30 October, the Nasdaq index declined 2.86%, with Nvidia down 4.2% and AMD down 10.9%. The Nasdaq‑100 fell more than 5.8% for the month, putting over $2 trillion at risk.
Looking ahead
Upcoming macro events could shape the sector’s trajectory in November. Apple’s earnings report, U.S. midterm elections and key economic data releases are identified as potential triggers. Strong Apple results could bolster confidence in AI‑related investments, while disappointing outcomes may sustain the current weakness.
Summary
AI‑focused cryptocurrencies experienced a 16% reduction in market capitalisation in October amid broader AI stock sell‑offs. The sector’s performance in November will likely hinge on Apple’s earnings, election outcomes and further economic indicators.
