"Bitcoin Plunges Amid AI Breakthrough; Crypto Market Cap Slips 5%"

Bitcoin Faces Selling Pressure Amid DeepSeek AI Launch; Market Reactions Could Shape Future Price Movements

Bitcoin, the world's leading cryptocurrency, has faced significant selling pressure in recent days, with the total cryptocurrency market cap slipping by over 5% in the last 24 hours. This decline has been one of the sharpest sell-offs since the inauguration of the new U.S. administration on January 20. Bitcoin itself has dipped around 5% in the last 24 hours, trading at around $99,800 as of this writing.

Ethereum, the second-largest cryptocurrency, has also experienced a significant decline, 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 the new U.S. administration signed several executive orders that many hailed as a landmark move for crypto adoption in the U.S. These orders, signed by President Trump on January 23, aim to clarify crypto regulations, encourage innovation, and establish the U.S. as a global leader in digital assets.

One of the central features of these orders is the creation of the Presidential Working Group on Digital Asset Markets, led by David Sacks, the newly appointed AI & Crypto Czar. This group will focus on developing a single set of Federal rules for how cryptocurrencies operate in the U.S. and evaluating the creation of a "strategic national digital assets stockpile."

However, the immediate trigger for this decline appears to be the release of DeepSeek R1, an innovative AI model unveiled by China's DeepSeek lab. 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. This breakthrough 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