With the Nvidia earnings report smashing expectations as per usual, it might have been expected that crypto AI tokens surge on the news. None of it. Despite some positive price action going into the news announcement, crypto AI tokens generally experienced a drop in price.
Nvidia earnings surpass expectations
Nvidia is the darling of US stocks. One of the ‘magnificent 7’, $NVDA has been responsible for around 11% of the entire S&P 500 performance over the past year. Its eagerly anticipated first quarter earnings report came in higher than Wall Street estimates once again.
Adjusted earnings were $6.12, higher than analysts forecast of $5.65, and revenue was up $26 billion, better than the expected $24.69 billion.
However, not only was $NVDA slightly down on the day, but AI cryptocurrencies were down a lot further.
The last time that positive $NVDA earnings hit the news, crypto AI tokens saw a considerable spike in price. This time, leading into the earnings report, a lot of the crypto projects in the AI niche were up. However, following the report they all sank below their daily opening prices.
Why did crypto AI tokens take a hit?
The weakness in price for the crypto AI niche also extended to the rest of crypto, and even to the stock market itself. The reason was simple. The Federal Open Market Committee (FOMC) minutes were released just before the Nvidia earnings came out, and this spooked the market more than the positive Nvidia news was able to rally it.
The minutes showed how worried the Federal Reserve was about inflation, and how some of the Fed officials were even willing to tighten, and hike rates instead of cutting them.
This had the effect of an ice-cold bowl of water being thrown on the market, and all major US stock indices closed down in price.
In the crypto market, AI plays such as $RNDR and $FET suffered a price slide after initial surges coming into the earnings announcement. $RNDR closed the day down nearly 5%, and fell as much as another 3% on Thursday. $FET closed around the same as its opening price after initially spiking more than 6% on Wednesday.
Thursday could see a rally
Nevertheless, Thursday might go some way towards rectifying the situation. $NVDA is looking at a pre-market price of $1,017, up drastically from its close of $949.50 on Wednesday.
Bitcoin is currently breaking out of a bull pennant on the very short 1-hour time frame and may be heading up to the highs again, while ethereum (ETH) is up more than 3% on the day and is getting closer to $4,000, and is only 5.7% below its March local high.
If $NVDA has a huge day on Thursday, the crypto market might be expected to hang on to its coat tails. The crypto AI sector could be expected to shine.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
