Crypto investors are reportedly uneasy about the high valuations of some artificial intelligence (AI) stocks.
The price of the leading cryptocurrency has fallen roughly 6% in the last two days, CNBC reported Tuesday (Nov. 4), while Ether, the second-biggest token in terms of market capitalization, has fallen nearly 10% during the same time frame.
As the report noted, the two coins draw many of the same investors as AI stocks, which means when one sector tumbles, it can hurt the other.
The Nasdaq Composite, which houses the leading AI stocks, fell 1% Tuesday, with investors selling AI-connected Palantir due to concerns over its high valuation in spite of a healthy quarterly earnings report.
The CNBC report also included comments from Compass Point analyst Ed Engel, who wrote in a note that while “selling from Long-term Holders is a common feature in bull markets, retail spot buyers have been less engaged than prior cycles.”
The latest downturn could pull bitcoin deeper into the red, taking the token below its crucial $100,000 support level, he added.
“With Long-term Holders still selling, this leaves further downside risk if Short-term Holders’ capitulate further,” Engel wrote. “While we see support for BTC above $95k, we also don’t see many near-term catalysts.”
Bitcoin’s price has been sliding downward in the past few weeks, the report added. In the past, October has been a strong month for the coin, but that did not come to pass this year.
In other crypto-related news, PYMNTS wrote earlier this week about the promises — and challenges — of using stablecoins for payments.
“Stablecoins today represent over $250 billion in circulating value, but that’s still a drop in the ocean of global money movement,” that report said. “What has held them back hasn’t been utility, as they already power billions of dollars in daily volume, but orchestration.”
Most businesses, PYMNTS added, don’t want to hold crypto wallets, deal with gas fees or have to worry about digital asset regulation. They want the speed and savings of stablecoins along with the familiarity of embedded payments systems.
While blockchain and, more specifically, stablecoins have helped introduce a new “plumbing layer” to traditional payment systems, the ability to orchestrate stablecoin payments at scale, all while routing, converting, reconciling and complying, still requires enterprise-grade infrastructure, PYMNTS wrote.
Source: https://www.pymnts.com/