Bitcoin (BTC) 
$108,883 price has dropped to $97,777 in the last 24 hours, now hovering around $100,500. This decline has led to significant drops for various altcoins, many of which are now trading below last year’s lows, resulting in increasing losses.
Crypto Predictions
As this article was being prepared, U.S. stock markets opened lower, with NVIDIA shares experiencing their largest decline since 2020, dropping 13%. This downturn is partly attributed to the emergence of a Chinese competitor to GPT, exacerbating negative sentiment in U.S. markets. However, Michael Poppe believes there’s no cause for major concern.
“Here we go. The real stories surrounding DeepSeek are beginning to emerge regarding government spending. Markets are quickly rebounding, including TAO and altcoins. I believe this trend will continue, and the ETH/BTC pair will rise. Don’t worry.”
DeepSeek and the Crypto Downturn
Nasdaq 100 futures saw a decline of 1000 points, opening with significant losses. NVIDIA’s stock plummeted for the first time since 2020. As the market opening approached, anticipated losses were being limited. Why did DeepSeek impact stocks and indirectly affect crypto? DeepSeek is reported to be a Chinese competitor to ChatGPT, developed in less than two months and allegedly outperforming ChatGPT in many areas while being significantly cheaper.
DeepSeek has officially become the number one app on both the U.S. and Chinese App Stores, a remarkable rise as it was not even in the top 100 list just a month ago. The search trend data shows that it is performing three times better than its competitors.
The product is claimed to have been developed for only $5.8 million, compared to OpenAI’s approximately 4,500 employees versus DeepSeek’s 200. This suggests that DeepSeek may achieve advanced machine learning capabilities with lower system requirements, giving it a significant competitive edge over the U.S. The markets are puzzled by how this has been accomplished. The question “Could AI be overvalued?” is being asked with increasing seriousness, leading to a considerable decline in tech stocks.
If better results can be achieved with less expensive chips, should NVIDIA shares experience double-digit declines? This is exactly what’s happening. While OpenAI charges users $60 for 1 million tokens, DeepSeek offers this for just $2.19.
What’s next? There are speculations that the Chinese government is financially backing this project and may be orchestrating market disruption through such narratives. We are likely to see more about the actual spending behind the $5.8 million figure. If this narrative does not hold, OpenAI’s competitor providing services at 30 times less cost could spell greater devastation for NVIDIA and U.S. tech stocks. We could potentially witness the emergence of a new dotcom bubble burst.
