Nvidia's latest earnings report has sent shockwaves through the market, with its stock price jumping in after-hours trading. However, the more significant impact is on AI-linked crypto tokens, which have seen a substantial increase in value.
The reason behind this correlation lies in the way investors view AI stocks and tokens as part of the same 'future tech' trade. When Nvidia beats expectations, it signals that demand for AI compute is still growing, sparking a risk-on reaction from traders.
As a result, investors are rotating into AI-themed tokens, betting that growth in centralized compute will eventually spill over into decentralized networks. Bittensor (TAO) and Internet Computer (ICP), marketed as decentralized AI infrastructure, have been among the top performers in this rally.