AI tokens are the real losers of the Deepseek revolution

Artificial Intelligence (AI) tokens were in the red during Asian morning trading hours, with Coingecko category drops 9%registering greater losses than Coindesk 20 – A crypto index – which fell by 5%.

Crypto investors, like their traditional financial counterparts, are likely digesting the impact Deepseek, a new AI model, is having on the industry.

Data from Deepseek Posted in Hugging Facean AI industry forum, shows that its model outperforms openai, all while built on a budget of $ 6 million and a small part of graphic processing units (GPUs) used by OpenAi – which recently closed a $6.6 billion round at a valuation of more than $157 billion.

Perhaps the most concerning of the eternal GPU Bulls is that Deepseek is so good that a version of it can run on your phone.

Naturally, some of the worst performing AI tokens have the most exposure to GPUs. Small cap node.ai, which facilitates access to GPUs, is down nearly 20%, according to Coingecko datathough aeither, which does the same (albeit at a higher market cap) Only 6% downslightly more than the Coindesk 20 benchmark.

Lessons from playing crypto

While Deepseek will make for a stressful week on OpenAi, Nvidia, and other AI-pivoted tech giants, it’s also a more pressing lesson for crypto projects — one that may be familiar to those with Crypto’s foray into gaming years ago.

Despite the pools of capital available to crypto AI projects, they have yet to do something as revolutionary or interesting as Deepeek has done.

Data from Coingecko pegs the value of the Crypto Gaming Sector (GAMEFI) at $ 19 billion. If the largest entries in this list, such as sandbox, gala, or desentraland, are The entries in the top-30 largest gaming companies by MarketCap They will hold respectable positions alongside the household names responsible for recognizable franchises.

But despite these projects just did not have the same success as their traditional counterparts.

Last year, blockchain gaming received the lowest investment since 2020, according to data source Dappradar. Only $ 1.8 billion is invested in blockchain gaming and metaverse projects, representing a 38% slide from 2023.

And while daily unique active blockchain gaming wallets advanced 421% last year, the sector’s dominance within the industry fluctuated between 26-29%, with Defi leading the way. However, the tally is lower than Steam games.

Besides, Some older and less popular games On Steam, from companies with market caps of a fraction of the gamefi giants, there is a larger following. Over the years, many crypto games have struggled to build a sustainable user base.

So, for now, one can say that crypto faces challenges in catering to use cases that go beyond finance.