October proved to be a challenging month for AI-related cryptocurrencies, as fears surrounding high spending, rising indebtedness, and uncertain returns triggered a sell-off in AI stocks. This sentiment spilled over into the crypto market, with the largest AI-associated cryptocurrency by market cap, $NEAR Protocol ($NEAR), dropping over 16% during the month. This decline wiped out nearly half of the 178% rally seen in September, highlighting the growing influence of AI-induced FUD on market dynamics.
The broader AI crypto sector also felt the pressure, with its total market cap falling from $16.32 billion on October 3rd to $13.72 billion by the end of the month. This 16% decline followed a significant 54% rally in September, which outpaced the wider crypto market's 24% increase. The sell-off was exacerbated by disappointing earnings reports from major tech companies like Intel and Amazon, as well as a 5.8% drop in the Nasdaq 100, putting over $2 trillion at risk.
Looking ahead, November could be a pivotal month for AI crypto. Key events such as Apple's earnings report, the U.S. midterm elections, and October's economic data releases could serve as major trigger points. A strong performance from Apple could bolster the AI trade, while disappointing results might lead to continued weakness in the sector. The outcome of these events will likely dictate the next move for AI-linked cryptocurrencies.