Cryptos endured a flash crash early this week as Bitcoin plunged below $98K following DeepSeek’s impulsive popularity.
The Chinese AI chatbot dominated trends due to its affordability, threatening demand for United States chips like Nvidia.
The news saw the crypto space tumbling, with tokens tied to artificial intelligence suffering the most after losing the $40B market cap mark.
However, DeepSeek didn’t survive for long as major setbacks emerged.
The dwindled interest in the AI platform has seen AI cryptocurrencies erasing their recent losses, displaying digital assets’ resilience to tech advancements.
AI experiment iDEGEN looks to leverage the enhanced sentiments for impressive performance after its February 27 exchange listing. Let’s dig deeper.
AI cryptocurrencies rebound as DeepSeek craze diminishes
DeepSeek’s sudden popularity shifted attention from AI cryptocurrencies, triggering flash crashes.
The Chinese startup launched its AI assistant early this week, which grabbed attention due to its low-cost structure and top-notch operations.
The news triggered significant plummets in US tech stocks, triggering billions in losses for the world’s richest.
That affected the stock prices of cryptocurrency mining firms, and AI-linked digital coins dipped.
However, DeepSeek has seen various setbacks over the past few days, which have seen AI tokens recovering.
The market cap of AI tokens targets pre-DeepSeek levels, currently above $38 after a 4% 24-hour increase.
Also, the $2.5 billion in daily trading volume highlights significant trader interest in artificial intelligence crypto assets.
DeepSeek’s escalating hindrances
Crypto enthusiasts lost interest in the new AI’s potential after multiple fake DeekSeek-linked tokens flooded the market.
While the platform explains that it does not associate with cryptocurrencies, scam activities quickly eroded the hype within the digital assets spectrum.
Further, China’s tech giant Alibaba launched another AI model, Qwen 2.5, claiming it outpaces DeepSeek version 3.
Alibaba’s news shook investor trust in DeepSeek’s dominance in the AI industry.
Also, the OpenAI team accused DeepSeek of stealing it’s the former’s data to train their model.
OpenAI stated that DeepSeek used “distillation” approaches. The strategy enables smaller models to duplicate larger ones’ performance cheaply.
Moreover, Italy has removed DeepSeek from App Store as authorities investigate how the AI handles personal data.
BREAKING: The Italian Data Protection Authority has requested information from DeepSeek, citing potential risks to the data of millions of people in Italy. It seems DeepSeek might not last long in the EU. Here’s the full release in English:
