What China’s DeepSeek AI Means for Crypto

What China’s DeepSeek AI Means for Crypto

On Monday, the world woke up to a new artificial intelligence (AI) model out of China.

And the news sparked a broad selloff across just about all markets. Nothing was spared. Stocks, gold, commodities, and crypto all went lower.

The culprit?

Chinese startup DeepSeek announced a new AI assistant called R1. The company claims it built its AI model for just shy of $6 million, yet its performance meets – and in some cases exceeds – the performance of ChatGPT.

To put that in perspective, it’s estimated that Open AI, the company that owns ChatGPT, will spend $5 billion this year on its AI operations.

The news that such an advanced AI model could be built so cheaply forced the market to ask itself if American AI stocks were getting left behind by China.

With many of these stocks priced for perfection, it caused a mammoth amount of selling, sending the U.S. stock market into a temporary tailspin.

The S&P 500 and Nasdaq indexes fell as much as 3.4% and 6%, respectively on the news.

Bitcoin briefly fell below $100,000 before rebounding. Meanwhile, established cryptos like Ethereum, Solana, and Dogecoin have fallen as much as 12%, 18%, and 14%, respectively, since the announcement by DeepSeek.

If true, the news from DeepSeek is a game changer for AI. And investors in Nvidia, Broadcom, and the other major chipmakers should be worried if AI companies can do more with less expensive chips.

But not us as Digital Asset Daily.

Today, I’ll tell you why – despite the volatility ripping through the markets – investors in the digital asset class have nothing to fear. In fact, this type of pullback is nothing we haven’t seen before.

Crypto is still on a trajectory to reach a size and scale that will make your head spin. So the most important thing you can do right now is stay rational.

A Cheaper Form of AI