Nvidia, the titan of graphics processing and AI hardware, has once again shattered its own records, reaching a new pinnacle in market value. As of June 26, 2025, the company’s stock price surged to unprecedented heights. Yet, in a twist that might surprise some market watchers, AI-focused cryptocurrencies have not followed suit. This divergence marks a significant shift in how investors are aligning their strategies within the rapidly evolving digital asset landscape.
The Waning “NVDA Effect” on AI Tokens
Historically, Nvidia’s ascension in the tech world often acted as a bellwether for AI-related cryptocurrencies. The so-called “NVDA effect” seemed to suggest that as Nvidia went, so went the market for AI tokens. But this time, the story appears different. Amid Nvidia’s meteoric rise, key AI tokens have stumbled. Tokens that once soared on the wings of Nvidia’s success now find themselves grounded. This trend contrasts with recent developments like FET’s outperformance of top AI tokens following a $50 million buyback announcement, highlighting the varied responses within the AI token market.
According to crypto analyst Jamie Reynolds, “Investors are becoming more discerning. They’re looking beyond the hype of AI and focusing on projects with tangible utility and real-world applications.” Reynolds’ insight points to a broader maturation within the crypto market, where investors are increasingly scrutinizing the fundamentals behind projects rather than riding waves of speculation.
Shifting Focus: From Hype to Utility
The crypto world is notoriously volatile, and the recent trajectory of AI tokens underscores this. Projects that previously fed off the buzz surrounding artificial intelligence are now being evaluated on their actual offerings. Lido and EigenLayer, for instance, have captured attention for their focus on staking solutions and blockchain interoperability—areas that promise immediate and practical benefits for users. As traders shift their focus, some are also turning their attention to new opportunities, as seen in our analysis of a shiny new token capturing market interest.
This pivot toward utility is not new, but it has gained momentum. As blockchain technology becomes more integrated into mainstream applications, investors are eyeing projects that solve real problems. “It’s no longer enough to just slap ‘AI’ on a whitepaper,” notes blockchain consultant Sarah Chang. “Investors are demanding more substance—how can this token improve processes like supply chain management or data analytics?”
A New Era for AI in Crypto
The current landscape might seem like a setback for AI tokens, but it also heralds a new chapter. As the dust settles, the projects that survive will likely be those that have built robust ecosystems and offer clear value propositions. Nvidia’s continued success could yet inspire innovation, but the days of automatic gains for AI-associated cryptos appear numbered.
Looking ahead, the crypto sector remains as dynamic as ever. The decline of the NVDA effect raises intriguing questions: Will other tech giants like Alphabet or Amazon influence crypto markets in similar ways? And how will AI tokens adapt to this changing environment?
The answers are not immediately clear, but one thing is certain—this isn’t the end for AI tokens. Rather, it’s a call for evolution and adaptation. As the market charts new courses, only time will tell which projects will rise to the challenge and capture the imaginations—and the investments—of the next wave of crypto enthusiasts.
Source
This article is based on: NVDA Hits New All-Time High, But AI Tokens Decline — The Fading “NVDA Effect” in Crypto
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
