DeepSeek news is sinking crypto too, but will the slump last?

While tech stocks may feel lasting pain, experts predict crypto could rebound quickly.

1/27/25 11:41AM

The news that DeepSeek’s new R1 model was created in just two months for under $6 million is triggering a significant sell-off, not only for the tech sector but for the crypto market, too.

The free Chinese open AI model, launched in December, targets competitors like OpenAI’s Chat GPT and Meta’s Llama and has risen to the top of Apple’s App Store. While tech stocks like Nvidia, Microsoft, and Oracle are taking the brunt of the beating, the crypto market is also hurting. As of 11 a.m. ET, crypto’s market cap was down 5.5% in the past 24 hours, according to CoinGecko.

The crypto ecosystem has been on a massive bull run in recent weeks, thanks mainly to Trump 2.0, but today some are panicking as they watch their assets tumble.

“DeepSeek just crashed crypto,” Altcoin Daily said on X.

Bitcoin’s dipped below $100,000 overnight, but has regained some of its losses already. Experts said that while markets have reacted aggressively, this probably won’t affect crypto in the long term.

“While this is bad news for investors in US tech stocks, it’s not bad news for the crypto industry,” said Charles Wayn, cofounder of Web3 infrastructure and digital credential network Galxe.

“Yes, we’ve seen a slide in crypto tokens today, but it won’t last as crypto is the biggest beneficiary of AI technology.”

While the correlation between bitcoin and tech stocks has been strong, hitting a two-year high in January, for most of 2024, the connection had actually broken down.

Several experts echoed the idea that the latest DeepSeek news as good for crypto, predicting the sell-off will ultimately slide off crypto within a day or two.

Kevin Rusher, founder of the real-world asset tokenization platform RAAC, went further.

“Crypto will probably be one of the biggest beneficiaries of growth in AI — wherever it comes from — if it can move blockchain technology forward and open up new possibilities for trading and more,” Rusher said.

“Most likely, we’ll see that reflected in the value of AI tokens over the coming days.”

Yaël Bizouati-Kennedy is a financial journalist who’s written for Dow Jones, The Financial Times Group, and Business Insider.

Sage D. Young

6/5/26

Zcash nosedives after counterfeit vulnerability revealed

The privacy-focused cryptocurrency has dropped more than 40% in the last 24 hours, shedding $3.8 billion in market capitalization.

$62B

Yaël Bizouati-Kennedy6/5/26

Bitcoin digital asset treasuries (DATs) have taken a big hit amid bitcoin’s tumble, shedding $62 billion in value since the asset’s October 6 all-time high, Artemis data shows, with their fully diluted market cap dropping to $72 billion from $134 billion in early October.

Meanwhile, bitcoin, which has fallen below $62,000 on Friday morning, is down 50% from its all-time high. DAT pioneer Strategy’s market cap stood at $102.2 billion on October 6, according to Macro Trends, and is now down to $45.6 billion, a 55% decline. Strategy has been in hot water since it sold 32 bitcoin earlier this week, and because its digital credit instrument, STRC, has been trading below its par value. Shares of Strategy are down 17% in the past week.

Sage D. Young6/4/26

“Sentiment for crypto is firmly in the gutter” as sector sinks, with tokens hitting multiyear lows

On Thursday, altcoins swept lower as bitcoin weakened. The tokens with the biggest losses in the last 24 hours are NEAR, ethena, and Zcash, each declining double digits in the period.

Other tokens have dropped to lows not seen in over a year in the past 24 hours:

Ethereum dropped 4.4% to under $1,780, a level not seen since April 2025.
XRP declined 4.5% to an 18-month low last hit in November 2024.
Solana decreased 6% to trade below the $70 mark, its lowest price since December 2023.
Dogecoin slid below $0.09, a 27-month low last seen in February 2024.

“Sentiment for crypto is firmly in the gutter as fears surrounding BTC/STRC and its potential overflow compound and overshadow anything that can be read as positive news (e.g. CLARITY movements),” according to Sean Dawson, head of research at crypto options platform Derive.xyz.

“[Altcoins] are high beta plays to BTC and are typically sold heavily in a downturn. Simply put, I’d be even more bearish on alts,” Dawson told Sherwood News.

“Further, liquidity has been drained into this year’s ‘superhot’ narrative of AI/data centers. In other words, there are just better, more exciting opportunities elsewhere,” Dawson added.

One cryptocurrency that has bucked the downtrend has been worldcoin, the native token for World, the digital identity project backed by OpenAI CEO Sam Altman. While the broader crypto market has been pushing lower, WLD has jumped nearly 5% in the last 24 hours and 90% in the past seven days, data from CoinGecko shows.

Yaël Bizouati-Kennedy

6/4/26

Bitcoin nears February lows amid $1.4 billion exiting its ETFs

“This week has been painful in crypto. There is really no other way of putting it.”