"DeepSeek AI's Launch Sparks Crypto Market Rout"

DeepSeek AI sparks crypto sell-off: What’s next for Bitcoin, Ethereum, and the crypto market?

The release of DeepSeek R1, an innovative AI model from China's DeepSeek lab, has sent shockwaves through the crypto market, triggering a broad sell-off across various assets. The crypto market cap has slipped by over 5% in the last 24 hours, sinking to $3.59 trillion, marking one of the sharpest sell-offs since Trump's inauguration on Jan. 20.

Bitcoin (BTC), the flagship crypto, has not been spared, dipping around 5% in the last 24 hours to trade at $99,800 levels as of this writing. 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 decline is curious, as it comes just two days after Acting SEC Chair Mark Uyeda launched a dedicated crypto task force to tackle regulatory ambiguity. Instead of soaring on this optimism, the crypto market appears to have buckled under an invisible weight.

What’s causing this dissonance? Could the sell-off be tied to deeper investor anxieties, or is it merely a case of “buy the rumour, sell the news”?

Let’s delve into the potential triggers behind this market-wide slump, unpack the details of Trump’s orders, and consider what the future might hold for digital assets in this new political era.

Decoding the recent decline

While the executive orders seemed like a bullish catalyst, other factors have emerged to overshadow the optimism, triggering a broad sell-off across the market.

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