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AI Tokens Are Getting Absolutely Demolished
February 3, 2025 at 2:09 PMby The Block Whisperer
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Crypto AI tokens crashed 15% as DeepSeek undercut pricing. Hype faded, whales dumped, and markets bled. Bulls eye support levels, but real utility is key for survival.
The crypto AI hype train just hit a wall – and it ain't pretty.
The sector's market cap just nosedived 15% in 24 hours, now sitting at a bruised $8 billion.
And those "next big thing" tokens like VIRTUAL and AI16Z just watched 60% of their value vanish faster than your friend's NFT portfolio in 2022.
It all started when DeepSeek, a Chinese AI startup, dropped its prices to $0.14 per million tokens.
OpenAI charges $15 for the same thing.
That’s some serious savings, but it has the AI orthodoxy shaking in its boots as previously well-founded assumptions are out the window.
Markets threw up everywhere on the news.
VIRTUAL dropped from $5.07 to $2.10.
AI16Z crashed from $2.47 to $0.61
GRIFFAIN slid from $0.45 to $0.17.
And that's not even counting the $279M in liquidated longs…
Pour one out for the leverage traders – they lost big on AI and SOL this week.
A few weeks ago, AI was all crypto Twitter could talk about.
But now, the conversation has gone ice cold, with chatter dropping from 70% to 32% within a very short time.
Everyone went back to posting about DeFi and ETFs, and now AI is left standing there awkwardly with big losses and no fanfare.
Some big players dumped $9.78M worth of AI16Z in 48 hours.
Meanwhile, NVIDIA's stock took a 20% hit, and you know what they say about correlation in a bear market...
But, not to be outdone, the bulls are pointing to a few things:
VIRTUAL is hitting support at $2, and whales are actually buying AI16Z at $0.50.
Plus, the Fed might cut rates, and cheap money always tends to help speculative assets like crypto.
Look, the bottom line is that DeepSeek just showed everyone that AI isn't as expensive as we thought.
For humanity, that’s a good thing. Cheap solutions and plentiful resources.
But when your whole investment thesis is "AI expensive, token go up"... well, those plentiful resources mean the value of what you’re selling can tank faster than horse stocks after Henry Ford entered the chat.
The crypto AI sector needs to prove it's more than just expensive API calls wrapped in token form.
As Standard Chartered's Geoff Kendrick put it: "AI's crypto integration must transcend cost arbitrage to survive."
Which just means build something useful, or die trying.
Watch those $2.0-$2.5 levels on VIRTUAL and AI16Z this week.
They might just tell us if this is a dip or a death spiral.
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