Asia Morning Briefing: Microsoft and Meta Surge on AI Earnings While Crypto AI Tokens Lag

By Sam Reynolds Microsoft and Meta both rocketed off in after-hours trading after reporting strong earnings, thanks to Artificial Intelligence, but on the crypto side, there wasn't much movement.

Key Highlights

• Microsoft and Meta reported strong earnings driven by their AI initiatives, yet AI-focused crypto tokens saw a slight decline.
• AI tokens, which typically track tech earnings, experienced a dip amid broader market uncertainty.
• Fed Chair Jerome Powell's comments on inflation added pressure to risk assets, affecting crypto market volatility.

Market Overview

Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk's Crypto Daybook Americas. Despite blockbuster earnings by tech giants Microsoft (MSFT) and Meta, which cited their AI efforts as a catalyst for beating earnings, AI majors in crypto are slightly down. Microsoft’s cloud revenue jumped 27% to $46.7 billion, with Azure crossing $75 billion annually as demand for AI workloads pushed datacenter capacity past two gigawatts. Meta reported a 22% year-over-year revenue increase to $47.5 billion, with a 43% operating margin, as AI-powered ad models lifted conversions by up to 5% and engagement on Facebook and Instagram surged. CoinGecko's AI token category, which includes tokens like TAO, NEAR, ICP, and RENDER, is down 1.4%. In contrast, the CoinDesk 20, a measure of the world's largest digital assets, is flat and trading below 4,000. Typically, AI tokens move in sync with earnings from big tech. Nvidia's record-breaking rally in 2024 helped push the category beyond a $10 billion market cap. However, bitcoin's rising dominance in the first half of 2025 pulled some air out of the category and other altcoins, pushing AI tokens below $5 billion. Traders across the crypto world took a breather following the Fed's recent messaging, which perhaps explains AI tokens' muted reception to MSFT and Meta's success. Market maker Enflux noted, "While policy remained unchanged, Powell’s remark that tariff-driven inflation may only be beginning added a layer of uncertainty that pressured risk assets across the board." They added, "With risk appetite fading and macro messaging turning less predictable, markets may remain in a holding pattern until participants gain clarity on inflation direction and policy response for the next few days or weeks." Nvidia is set to report its earnings towards the end of August. Time will tell if the GPU giant's expected solid results will serve as a catalyst for AI token growth.

Market Movements

• BTC: Crypto markets turned volatile on Wednesday as hawkish remarks from Fed Chair Jerome Powell triggered over $200 million in liquidations, with bitcoin briefly falling below $116,000.
• ETH: Ether (ETH) is holding above $3,800, up 1.47%, as corporate treasuries like SharpLink Gaming continue to bid on the asset for their balance sheets.
• Gold: Gold fell 1.17% to $3,288.02 on Wednesday as strong U.S. economic data reduced safe-haven demand and reinforced expectations that the Fed will keep rates steady.
• Nikkei 225: Asia-Pacific markets traded mixed Thursday as investors weighed new U.S. tariffs on South Korean imports and awaited the Bank of Japan’s expected decision to hold rates steady.
• S&P 500: The S&P 500 slipped 0.12% to 6,362.90 after Fed Chair Powell signaled no imminent rate cuts amid tariff-driven inflation concerns.

Elsewhere in Crypto

• Trump's Top Crypto Guys: U.S. DeFi Will Thrive, Assures Bitcoin Reserve Is Coming (CoinDesk)
• Polygon suffers hour-long outage weeks after complex hard fork (The Block)
• 10 years on, Ethereum has rebuilt itself time and again without compromising on its values, community members say (The Block)

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Frequently Asked Questions (FAQ)

AI and Crypto Market Correlation

Q: Why did AI-focused crypto tokens decline despite strong AI earnings from Microsoft and Meta? A: Typically, AI tokens track the performance of big tech companies in the AI sector. However, broader market uncertainty and hawkish comments from Fed Chair Jerome Powell regarding inflation likely pressured risk assets, including crypto AI tokens, leading to a muted reaction to the positive tech earnings. Q: How have AI tokens historically performed in relation to tech earnings? A: Historically, AI tokens have shown a tendency to move in sync with earnings from major tech companies, especially those with significant AI initiatives like Nvidia. Nvidia's strong performance in 2024, for example, boosted the AI token category. Q: What factors can cause AI crypto tokens to diverge from tech earnings? A: Factors such as overall market sentiment, macroeconomic conditions (like interest rate expectations and inflation concerns), and shifts in investor risk appetite can cause AI crypto tokens to diverge from the performance of traditional tech stocks, even when the underlying AI advancements are positive.

Market Volatility and Fed Influence

Q: What impact did Fed Chair Jerome Powell's comments have on the crypto market? A: Fed Chair Jerome Powell's remarks, particularly those suggesting that tariff-driven inflation might be just beginning, introduced a layer of uncertainty. This uncertainty pressured risk assets across the board, contributing to increased volatility and potentially leading traders to adopt a more cautious stance, thus affecting AI tokens' response to tech earnings. Q: What does "holding a pattern" mean in the context of market uncertainty? A: When markets are in a "holding pattern," it suggests that trading activity is relatively stable without significant upward or downward momentum. This often occurs when investors are awaiting clearer signals or more predictable economic conditions before making significant moves.

Future Outlook for AI Tokens

Q: What is the outlook for AI tokens in the near future? A: The market sentiment suggests that AI tokens may remain in a holding pattern until there is more clarity on inflation direction and the Federal Reserve's policy response. Future performance will likely depend on upcoming earnings reports, such as Nvidia's, and the broader economic outlook.

Crypto Market AI's Take

The recent divergence between the strong performance of tech giants like Microsoft and Meta in their AI ventures and the slight decline in crypto AI tokens highlights the complex interplay of factors influencing the digital asset market. While corporate AI advancements are positive indicators for the sector, macroeconomic headwinds, such as inflation concerns and potential policy shifts from the Federal Reserve, can significantly dampen investor sentiment towards risk assets. At Crypto Market AI, we focus on providing data-driven insights and robust tools to navigate these market dynamics. Our AI-powered trading bots are designed to analyze market sentiment and execute strategies even amidst such volatility, while our market analysis tools offer in-depth perspectives to help investors make informed decisions.

More to Read:

• AI Crypto Coins Drive 2025 Innovation as Blockchain and AI Converge
• Understanding Ripple: The Cryptocurrency Powering Global Payments
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Source: Originally published at CoinDesk on July 31, 2025.