"AI Breakthrough Sparks Crypto Market Rout"

The release of DeepSeek R1, an innovative AI model by China's DeepSeek lab, has sparked a significant sell-off in the cryptocurrency market, with the total market cap of AI-focused cryptocurrencies shrinking by 8% to $38 billion. This decline has been accompanied by a broader sell-off in the crypto market, with the total cryptomarket cap slipping by over 5% in the last 24 hours to $3.59 trillion.

Bitcoin (BTC), the flagship crypto, has not been spared, dipping around 5% in the last 24 hours to trade at $99,800 levels. Meanwhile, Ethereum (ETH) has tumbled even further, losing 7.5% of its value to hover around $3,100. Altcoins have fared even worse, with losses ranging from 10% to 20%.

The timing of this sell-off is curious, as it comes just days after President Trump signed several executive orders that many hailed as a landmark move for crypto adoption in the U.S. These orders came just two days after Acting SEC Chair Mark Uyedalaunched a dedicated crypto task force to tackle regulatory ambiguity. However, instead of soaring on this optimism, the crypto market appears to have buckled under an invisible weight.

The immediate trigger for this decline appears to be the release of DeepSeek R1. This open-source large-language model has been described as a major milestone for artificial intelligence, with Marc Andreessen calling it “AI’s Sputnik moment.” What makes DeepSeek R1 stand out is its efficiency—it matches or surpasses the performance of leading models like those from OpenAI, but it was built on a modest $6 million budget and uses significantly fewer GPUs.

While this breakthrough is a huge leap for AI, it has rattled the market for AI-related crypto assets as investors reassess the value of tokens tied to GPU-intensive operations. Render (RNDR), Near Protocol (NEAR), The Graph (GRT), and Artificial Superintelligence Alliance (FET) are among the hardest hit, with losses ranging from 7% to 9%. Node.AI (GPU), which is heavily reliant on GPU-based operations, has seen a staggering 20% drop.

The sell-off created a ripple effect, spilling over into the broader crypto