TL;DR
- The launch of China’s DeepSeek AI application triggered a significant downturn in the crypto market, causing AI tokens to plummet and Bitcoin to drop below $100K.
- AI-related cryptocurrencies saw a nearly 10% drop in market capitalization, with top AI tokens like NEAR, RENDER, and FIL experiencing substantial losses.
- Bitcoin fell by over 10%, exacerbated by liquidated leveraged positions. At the same time, major altcoins and meme coins also saw significant declines.
The crypto market experienced a significant downturn, triggered by the launch of China’s DeepSeek, an advanced AI application. The market saw a sharp decline in the value of AI tokens and a notable drop in Bitcoin prices, which fell below the $100K mark. This event has sent shockwaves through the crypto community, highlighting the volatility and interconnectedness of global financial markets.
Impact on AI Tokens
The launch of DeepSeek, a Chinese AI startup, has had a profound impact on AI-related cryptocurrencies. The market capitalization of AI tokens plummeted by nearly 10% in just 24 hours, dropping to $42.50 billion.
The Top five AI tokens were among the hardest hit. NEAR, RENDER, and FIL dropped between 10% and 15% and are trading at around $4.46, $6, and $4.45, respectively. TAO and ICP also recorded losses between 5% and 9%, trading around $391 and $8.32, respectively.
The sudden rise of DeepSeek, which offers advanced AI models at a fraction of the cost of its competitors, has disrupted the market and caused widespread panic among investors.
Bitcoin’s Decline
Bitcoin was not immune to the market turmoil. BTC prices fell by over 10%, dropping from a daily high of $105,277 to a multi-week low of $97,785. This decline was exacerbated by liquidating leveraged positions, with traders collectively losing over $850 million.
At the time of writing, BTC still trades under the $100K mark but has slightly recovered to $98.000. The broader market sentiment was further dampened by concerns over the upcoming Federal Open Market Committee meeting, which added to the uncertainty and selling pressure.
Broader Market Reactions
The ripple effects of the DeepSeek launch extended beyond AI tokens and Bitcoin. Major altcoins, including Ethereum (ETH), Solana (SOL), and Ripple (XRP), also saw significant declines. Ethereum dropped to $3,054, while Solana and Ripple fell by nearly 12% and 10.6%, respectively.
BNB and ADA also registered massive losses, dropping between 5% and 10%. Meme coins, such as Dogecoin (DOGE) and PEPE, experienced even steeper declines, with DOGE falling over 11% and PEPE losing 16% of its value.
The launch of China’s DeepSeek has triggered a major market correction, highlighting the fragility and interconnectedness of the crypto market. As investors grapple with the implications of this event, the market remains on edge, with further volatility expected in the coming days.
