- China’s DeepSeek AI app disrupts the market with its cost-effective development.
- Investor skepticism leads to a sell-off in US tech stocks and crypto assets.
- Bitcoin and major altcoins like XRP and Solana see double-digit losses.
Bitcoin dipped to $98,000, and tokens like XRP, Solana, and Dogecoin dropped over 11% today as a new AI competitor from China triggered a global market correction. The sell-off in US tech stocks spilled into the cryptocurrency market, causing sharp declines.
DeepSeek AI Sparks Market Turmoil
China had unveiled DeepSeek, an AI alternative to ChatGPT, developed for less than $10 million. Despite its low development cost, the app has already overtaken ChatGPT as the top free app on the Apple App Store. In contrast, ChatGPT has raised nearly $17 billion in funding, raising concerns about overvalued tech projects in the United States.
According to Mystery of Crypto, this unexpected competition has cast doubt on the sustainability of US-based AI dominance, leading to a significant pullback in tech stock investments. The US stock market, which saw rapid growth fueled by AI hype over the past two years, is now facing a correction as investors reassess valuations.
Crypto Market Feels the Ripple Effect
The impact hasn’t been limited to traditional markets. Cryptocurrencies, closely tied to investor sentiment in tech, also took a hit. Bitcoin saw its price drop to $98,000, while altcoins like XRP, Solana, and Dogecoin posted losses exceeding 11% within 24 hours.
Related: Crypto Market Dip: Key Price Levels for XRP, ADA, DOGE, BNB, and TRX
AI and blockchain-related tokens have been particularly hard hit, with declines of up to 41% in some cases. Tokens like Virtuals Protocol (VIRTUAL) and AI Rig Complex (ARC) suffered significant losses. Virtual Protocol dropped 22% over the past week, and ARC plummeted by 41.7%, making it one of the worst-performing AI-related cryptocurrencies.
Even tokens with steady traction in AI applications, such as Freysa AI (FAI) and OriginTrail (TRAC), faced declines of 31.3% and 14.8%, respectively.
Related: Bitcoin Price Dips Again—What Hayes Thinks Will Happen Next
As of this press time, Ethereum has been down by 7.3% in the past day and is currently trading at $3,066. Similarly, Solana and XRP have dropped 11.5% and 10.4% in the same period.
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Source: https://coinedition.com/the-real-reason-xrp-solana-and-dogecoin-tanked-11-today/