The post DeepSeek’s Rise: What Is It and How It’s Shaking Up the Crypto Market appeared on BitcoinEthereumNews.com.

DeepSeek’s $6M AI outperformed $100M models, disrupting markets. AI coins are volatile, but innovation may drive growth. This shockwave hit the AI industry as a Chinese startup named DeepSeek introduced epoch-making AI models at a fraction of the price at which U.S. tech giants do. The ripples of this innovation trickled down in the market and dented the AI coin market cap, sending it to below $44 billion with a plunge of 7.66%. Tokens such as Near Protocol (NEAR), Internet Computer (ICP), and Render (RENDER) faced a significant drop in value. DeepSeek’s rise, despite the market turmoil, is a revolutionary way of building AI. At a cost of only $6 million, where competitors like OpenAI need to spend $100 million, DeepSeek is raising the bar on efficiency and affordability. Its app topping the Apple Store rankings also adds to its visibility. DeepSeek AI Launch Sparks Market Panic The cryptocurrency market had its first major flash crash of 2025 on Monday, as Bitcoin (BTC) and the major altcoins suffered double-digit losses. The total market capitalization fell from $3.61T to $3.34T in a single day. But now it has recovered to 3.52T, leading altcoins to gain back their yesterday’s loss.  However, the crash removed $850 million in leveraged positions and reduced $269 billion from the total capitalization of the market, engendering widespread fright among traders and investors. Following DeepSeek’s public declaration, severe declines hit the United States stock market, already bruised by investor jitteriness over-inflated valuations for technology stocks. On January 26th, the US stock market saw a $787 billion loss, with Nvidia’s market value plummeting by nearly $1.5 trillion. The market sell-off was amplified by institutional investors’ entry into crypto markets. AI-related cryptocurrencies suffered the most significant losses, with tokens tied to artificial intelligence projects dropping as much as 70%. Meme…

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Filed under: News - @ January 28, 2025 11:21 am