Bitcoin and Altcoins Tumble as Chinese AI Disrupts US Tech Markets
A global selloff in riskier assets was spurred by the introduction of a new Chinese artificial intelligence model, which caused Bitcoin and other cryptocurrencies to plummet. Monday morning’s 6.5% intraday decline in Bitcoin was the largest since December 6. Deeper losses were incurred by smaller tokens. With a steep loss in US technology futures, the crypto declines reflected weakness in most stock markets.
Donald Trump issued an executive order last week to promote the cryptocurrency business immediately after his return to the White House. However, traders have so far dismissed the move, with some claiming that prices already reflected it. The risk-off sentiment in cryptocurrency on Monday was exacerbated by worries that the AI model of Chinese firm DeepSeek will negatively impact tech valuations.
The Chinese LLM poses a potential threat to US equity markets by disrupting US AI dominance with their cost efficiency and groundbreaking open-source technology. Now the question is how will Trump retaliate?
QCP Asia
US Crypto Policy in Focus: Trump’s Working Group to Shape Regulatory Future
The decline follows the President’s long-awaited executive action on Friday, which called for the formation of a working group to advise the White House on crypto policy. Within six months, the group must provide a regulatory framework for digital assets in the US while assessing the establishment of a cryptocurrency stockpile. The directive did not explicitly indicate that the United States would create a Bitcoin reserve, as Trump had promised throughout the campaign.
After the ruling was issued on January 24, the digital asset market saw some modest gains. Since Trump won the election in early November, Bitcoin has increased by more than 50%. Trump had previously been skeptical about cryptocurrency, but he changed his mind during the campaign, partly because the sector increased its political contributions. He appointed venture capitalist David Sacks as the artificial intelligence and cryptocurrency czar in December and promised to establish the US as the global center of cryptocurrency.
After a string of bullish news — like pro-crypto regulatory appointments, new ETF product filings, and executive orders — the market seems to be catching its breath,
Justin d’Anethan, head of sales at Liquifi
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