Turbulence hit the cryptocurrency market today as the Chinese AI platform DeepSeek faces a major setback. Bitcoin‘s value dropped sharply, hitting $97,777, while NVIDIA’s stock suffered losses estimated in the hundreds of billions. The U.S. market felt the impact with nearly $1 trillion wiped off, leading to close to $1 billion worth of liquidations in the cryptocurrency sector. What triggered this market turmoil?
Is DeepSeek in Trouble?
What Measures is DeepSeek Taking?
As this report is being finalized, DeepSeek has declared that it is under severe attack and has consequently paused its services. To mitigate the situation, the platform has halted new user registrations to focus on addressing the ongoing threats.
“Due to large-scale malicious attacks on DeepSeek’s services, we are temporarily limiting registrations to ensure continuity. Existing users can log in as usual. Thank you for your understanding and support.”
Emerging as a competitor to ChatGPT, DeepSeek claims to deliver superior results using significantly less processing power. However, experts argue that its estimated cost of $5.8 million may be misleading, suggesting it could be indirectly funded by the Chinese government, indicating greater financial backing than initially perceived.
- DeepSeek’s rapid rise could diminish demand for NVIDIA chips.
- The situation parallels the overvaluation trends seen during the dot-com bubble.
- Trump’s administration may respond to mitigate the fallout from these developments.
The turbulence in risk markets today can largely be attributed to the issues surrounding DeepSeek, drawing attention to the fragility and volatility within the tech-driven sectors of the economy.
