Tokens linked to artificial intelligence (AI) have seen steeper declines compared to major cryptocurrencies in the past 24 hours, as the market faces heightened volatility. This weakness comes amid an uptick in unusual activity in Nvidia (NVDA) put options, as the chipmaker announced on Monday its plans to begin constructing AI supercomputers in the U.S.
While Bitcoin (BTC), the largest cryptocurrency by market capitalization, saw a slight gain of 0.6%, rising to $85,500, tokens like TAO, associated with the Bittensor machine learning network, dropped 3.6% to $239. Similarly, Render Network’s RNDR token, which powers decentralized GPU rendering, fell by 1.7% to $3.93, according to data from CoinGecko. Other AI-related tokens, such as FET, SEI, and GRT, also lost around 2%.
Nvidia’s put options saw notable trading activity on Monday, particularly in short-dated contracts, according to data from Convex Value. The highest volume was seen in $100 strike put options set to expire on April 17, April 25, and May 2. Additionally, there was significant movement in $60 puts expiring on April 17, and $50 and $85 strike puts set to expire on May 16.
Convex Value labeled this surge in out-of-the-money put options—where strike prices are lower than Nvidia’s current market price of $110—as unusual. “My bet would be these are protective plays,” said an analyst from Convex Value, explaining that traders might be hedging against a potential decline in Nvidia’s stock price.
Put options, in essence, function as a form of insurance against market drops, allowing traders to hedge their positions or speculate on potential downturns. As interest in these protective options rises, some analysts speculate that there may be insider knowledge driving this activity.
“Someone knows something,” Merlin Capital, an analytics service, posted on X, suggesting that the increased interest in Nvidia puts could indicate expectations of a market shift.
