Crypto prices fell 6.5% on average on Jan. 27 amid a major sell-off in risk assets prompted by a Chinese artificial intelligence (AI) model raising worries about AI profitability.
However, AI-related tokens saw slightly lower average declines for the day at 5.4%.
Based on CryptoSlate data, AI tokens with the worst daily performances are AIOZ Network (AIOZ), Render (RENDER), and Arweave (AR), which fell 10.2%, 9.3%, and 9.4%, respectively.
Meanwhile, Bittensor (TAO) eased the impact with a 5.6% price increase over the past 24 hours.
Nvidia and other AI companies’ stocks slumped after news about the Chinese startup DeepSeek’s latest artificial intelligence model surfaced.
The reports pointed out that the new model can perform like high-end large language models (LLMs) that are currently dominating the market, including OpenAI’s ChatGPT, while running on significantly cheaper hardware.
Notably, the performance of AI tokens is usually related to the traditional AI equities market and general industry events like Nvidia’s strong earnings calls, which have boosted their prices in recent months.
Memecoins and real-world assets (RWA) also had relatively softer declines — down an average of 4.9% and 5.3%, respectively.
The “smart contract platform” category, which includes major cap crypto such as Solana (SOL) and Sui (SUI), also saw slightly lower drawdowns of roughly 5.3% each.
Bitcoin (BTC) and Ethereum (ETH) also suffered losses below the market average, falling 3% and 4.9% daily.
Tokens related to liquid staking services, such as Lido (LIDO) and Rocket Pool (RPL), suffered an 11% correction, registering the worst performance out of Artemis’ 22 categories.
Data availability and Bitcoin ecosystem tokens also registered two-digit slumps in the daily timeframe.
An opportunity like the ‘Trump Trade’
Aurelie Barthere, principal research analyst at Nansen, said the major sell-off in risk assets was necessary to trigger investor profit-taking after pricing in a significant amount of good news.
She noted that crypto markets and AI supply chain-linked stocks, such as the Nuclear ETF, soared up to 20% over the past month, so the current movement is not a shift in the market.
On AI stocks, Barthere added:
“For AI stocks, the outlook remains bullish for now, highlighted by TSMC’s recent upbeat guidance. However, this optimism must be reinforced by upcoming earnings reports from Nvidia, ASML, and Big Tech in the next few weeks, which will need to beat expectations to sustain the momentum.”
She also noted that this correction could offer an opportunity for investors who missed out on the Trump crypto trade to enter the markets, particularly in higher-beta crypto tokens like SOL, which have experienced steeper sell-offs compared to BTC.
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