DeepSeek Sparks Sell-Off in Crypto and Tech

A wave of concern over the open-source, out-performant Chinese AI, DeepSeek, has triggered a broad sell-off in digital assets and global tech equities.

What’s the scoop?

• Crypto Token Sell-Off: Bitcoin briefly dropped under $100K as whales liquidated overleveraged positions, while GPU-heavy tokens saw declines of up to 40% as investors conjectured that this impacted hardware-intensive AI bets.
• Equities Under Fire: Trad markets took an equal beating, as Nasdaq futures tumbled 700 points and large-cap AI stocks like Nvidia dropped 10% in pre-market trading on fears of how this would impact their products
• Background on DeepSeek: DeepSeek outperformed ChatGPT across several benchmarks and gained international attention for achieving these results at a fraction of the cost, raising questions about the efficiency of American AI training.

Bankless Take

While DeepSeek is certainly a significant and interesting development, the backdrop of Trump’s tariff threats and the looming FOMC meeting have certainly done nothing to ease uncertainty across the market. On the flip side, DeepSeek may be a powerful catalyst for decentralized AI, introducing a highly performant, open-source model onto the market for crypto to leverage how it sees fit.