The recent surge in the popularity of China-based artificial intelligence (AI) startup DeepSeek has caused major turbulence in the crypto market. Bitcoin (BTC) and other cryptocurrencies faced significant declines following the rise of DeepSeek, highlighting the growing correlation between AI breakthroughs and crypto prices.
Also Read: Dogecoin: A Crypto Revolution or Risk to Financial Stability?
DeepSeek Triggers Market Selloff
On January 20, 2025, DeepSeek launched its open-source AI model, R1. Within a week, the AI chatbot gained immense traction, quickly overtaking OpenAI’s ChatGPT as the highest-rated free app on the Apple App Store. The app’s surge caught the attention of tech enthusiasts and investors, sparking a broader market selloff.
The crypto market was not immune to this sudden market shift. Bitcoin price, which had soared above USD 105,000 earlier in the week, plummeted below USD 98,000 before making a brief recovery. This rapid decline was mirrored in the stock market, with the tech-heavy NASDAQ losing over 3% in value.
Current Bitcoin Price Update
Bitcoin continues to show a steady performance in the market. Here’s the latest data:
- Bitcoin Price (AUD): $164,968.97
- 24-Hour Change: +3.1%
- 24-Hour Trading Volume: $86.7 billion
- Market Capitalisation: $2 trillion
Bitcoin Price (USD):
- Current Price: $103,224
- 24-Hour Change: +3.1%
- Market Capitalisation: $2.05 trillion
- Fully Diluted Valuation: $2.05 trillion
- 24-Hour Trading Volume: $71.06 billion
Bitcoin Performance:
- 1 Hour: +0.1%
- 24 Hours: +3.1%
- 7 Days: +1.2%
- 14 Days: +8.5%
- 30 Days: +8.7%
- 1 Year: +141.7%
Bitcoin’s price has seen a solid increase in the last 24 hours, with continued upward momentum over the last month and year. Keep an eye on the fluctuations as the market reacts to new developments.
Figure 1: Bitcoin Price surge in the last 24 hours
The Rise of DeepSeek and Its Impact on Tech Stocks
DeepSeek’s popularity has raised significant concerns among investors. The company has claimed that its model only cost $5.8 million to train—an impressively low figure compared to the $17.9 billion OpenAI has invested in its models. Additionally, DeepSeek allegedly uses fewer chips to train its models, claiming to produce faster and more efficient results.
This led to a sharp drop in US tech stocks, particularly Nvidia (NVDA), which saw its market capitalization lose over $600 billion. The fall in stock prices contributed directly to the crypto market’s decline, as the correlation between traditional tech stocks and crypto prices continues to grow.
A ‘Buy the Dip’ Opportunity?
Despite the volatility, some analysts see the recent market pullback as a potential opportunity. Geoffrey Kendrick, global head of digital asset research at Standard Chartered Bank, remains optimistic. In a report, Kendrick stated, “Buy the dip.” He argued that much of the downward movement had already been priced into the market and that Bitcoin’s recent selloff could signal the end of the current correction.
Kendrick had previously warned of a potential 10% to 20% correction, attributing it to the overzealous expectations surrounding Trump’s crypto executive order. However, he believes that the overnight selloff likely accounted for much of this correction.
Despite potential short-term pain, Kendrick pointed to the rapid decline in U.S. Treasury yields as an indicator that the worst might be over. He also noted that institutional asset flows would likely increase in the coming weeks and months, providing support to the crypto market.
Altcoins Surging Amidst Bitcoin’s Struggles
While Bitcoin price remains the focal point for many crypto investors, a number of altcoins have shown impressive gains in 2025. Several top altcoins, including Solana (SOL), XRP (XRP), and Chainlink (LINK), have already surged by 30% to 50% this year. These cryptocurrencies could outperform Bitcoin if the market continues to favour alternative assets.
Solana: A Promising Altcoin
Solana has been on a meteoric rise, becoming the fifth-largest cryptocurrency by market cap. In January 2025, Solana’s price surged from $185 to $295 in just a week. At the time of writing, Solana is trading at around $242, and some analysts predict that it could reach $400 by the end of the year.
A major catalyst for this growth is the potential approval of a spot exchange-traded fund (ETF) for Solana. If this happens, analysts estimate that $6 billion could flow into Solana over the next 12 months. The increase in user activity, particularly in Solana-based meme coins and decentralized exchanges, further bolsters the coin’s outlook.
XRP: Regulatory Clarity Fuels Growth
XRP has also experienced significant growth in 2025. The coin has surged 53% year-to-date, driven by the improving regulatory environment for Ripple, the company behind XRP. With former SEC Head Gary Gensler stepping down, the regulatory outlook for Ripple has become much more favourable.
Chainlink: Strong Fundamentals Amidst Recovery
Chainlink, a leader in blockchain data oracles, is also showing signs of a strong recovery. Despite underperforming in recent years, Chainlink’s position as a key player in decentralized finance (DeFi) gives it strong long-term potential. Chainlink’s involvement in the tokenisation of real-world assets (RWAs) is another promising growth area, with RWA tokenisation expected to be a multitrillion-dollar market opportunity in the coming years.
The Ripple Effect: Crypto Prices and Tech Stocks
As seen in the recent selloff, the crypto market is increasingly affected by the broader tech market. The rise of DeepSeek and its impact on major tech stocks highlights the sensitivity of crypto prices to technological developments. If DeepSeek’s AI model continues to disrupt the market, we may see further declines in Bitcoin and other crypto assets, especially if tech stocks remain under pressure.
However, the dip in crypto prices presents an opportunity for investors to buy into these assets at a lower price. If the broader market recovers and institutional inflows continue, Bitcoin and altcoins like Solana, XRP, and Chainlink could experience significant growth in the months ahead.
Conclusion: A Cautious Optimism for Crypto
The current market volatility, driven by the rise of DeepSeek and its impact on both tech stocks and crypto prices, has led to considerable uncertainty. However, analysts like Kendrick remain optimistic, believing that the dip in Bitcoin prices presents a buying opportunity for those willing to weather the storm. With growing institutional interest and the continued development of blockchain technology, the long-term outlook for crypto remains promising.