NVIDIA Chip Ban May Soon Spark Crypto Market Weakness

The crypto market has been waiting for the U.S. Fed to cut interest rates. Traders believe lower rates could bring money back into risk assets like crypto.

But before that decision even arrives, another problem has already hit global markets. China has told its top tech companies to stop buying NVIDIA’s artificial intelligence (AI) chips and to cancel existing deals.

This move has pushed NVIDIA stock lower, and the weakness could spill into the crypto market.

China’s Ban Hits NVIDIA Stock

China is the biggest buyer of NVIDIA’s high-end chips. These chips are used to train strong AI models.

Now Beijing has banned these imports. It wants local companies to use homemade chips instead.

This move is part of the long fight between the U.S. and China over who will lead in AI and new technology.

The chip in discussion is the RTX Pro 6000D. It is not a gaming card but a server-level GPU, mainly used for big tasks like training AI or powering data centers.

It comes with GDDR7 memory, which makes it faster than older versions. The chip is also very costly, with prices in China running close to 50,000 yuan.

Many large firms were already testing it or planning to use it before Beijing’s ban. This makes the decision even more impactful.

NVIDIA shares reacted right away.

The stock fell more than 1.6% in pre-market trade, down near $174. Some investors still think demand in other regions could push the price up toward $200.

But many fear this could make the stock dip more. The reason this matters is size. NVIDIA is the world’s most valuable chipmaker and one of the most important stocks in the U.S. market.

It is worth more than the entire economies of the UK, Canada, or Russia. When a company this large starts to fall, investors across tech and crypto worry that the sentiment might turn bearish.

China has caused similar market shocks before.

In 2021, it banned Bitcoin mining, which forced miners to shut down or move overseas. Price went down for weeks.

The new chip ban is different in detail but shows the same pattern: one policy move from Beijing can disturb the global markets.

AI Tokens Already Feel the Pressure

The weakness in NVIDIA stock is already showing up in AI-linked crypto tokens, even before the news hit headlines. Fetch.AI (FET) fell about 2.5% in one day.

Internet Computer (ICP) dropped more than 4% in the past week. Akash Network (AKT) has lost over 10% in the past 30 days, and Qubic (QUBIC) is down nearly 30%.

Most AI coins have been moving sideways or falling for weeks. If NVIDIA keeps struggling, that weakness could get worse.

There is also a direct link between these tokens and NVIDIA chips.

Render (RNDR) lets people rent out their unused graphics power, and much of that power comes from NVIDIA chips.

Akash (AKT) runs decentralized cloud services, many of which are built on NVIDIA-based servers.

Bittensor (TAO), a blockchain for training AI models, depends on GPU farms that use NVIDIA parts.

If chip supply slows or prices rise, these projects could face slower growth, higher costs, and less interest from investors.

Why the Crypto Market Should Care About NVIDIA

AI tokens have been one of the big reasons altcoins went up since 2023. Many investors believed AI crypto projects could grow if they helped solve real computing tasks.

But the NVIDIA chip ban now puts that growth in doubt. If one of the top chipmakers cannot sell to a large market like China, both AI stocks and AI crypto tokens could face more trouble.

The Fed’s next rate cut decision is still the main headline. But if NVIDIA stock keeps falling, it could hurt tech, AI, and other risky markets.

Crypto often reacts quickly to these kinds of moves because prices depend so much on investor mood. If traders see tech and AI turning weak, they may step back from altcoins too.

So, the real question now is not only whether the Fed cuts rates. It is also whether NVIDIA stock can recover from China’s ban. If it cannot, both Wall Street and the crypto market could see another slide.