AI Crypto Market Dips Amid DeepSeek’s Growing Influence

The Artificial Intelligence (AI) application, DeepSeek’s growing influence has been impacting the crypto market, and AI cryptos has particularly seen a significant decline, with a 24-hour market cap drop of 12.3%. The AI Agents subsector also recorded a decrease of over 20% in its total market cap, according to CoinGecko and Sosovalue data.

AI Cryptos bleed Amid DeepSeek’s Momentum

On January 27, CoinGecko reported declines in AI-related cryptocurrencies. For instance, Near Protocol (NEAR): Down 10.8%, priced at $4.52. Render (RNDR), too is  down 12.9%, priced at $6.14. ai16z: Down 17.4%, priced at $0.6762, Virtual: Down 18.3%, priced at $2.05, Internet Computer (ICP): Down 8.3%, priced at $8.43 and Griffain, too dipped 27.5%, and is currently priced at $0.29

This market dip is attributed to the rising influence of DeepSeek, a Chinese AI startup that is challenging U.S. tech dominance. Launched on January 15, DeepSeek recently became the most downloaded free app on the Apple App Store in both the U.S. and China, surpassing OpenAI’s ChatGPT. The platform also launched two advanced models, DeepSeek-V3 and DeepSeek-R1, offering performance comparable to OpenAI at a fraction of the cost.

DeepSeek’s success has raised concerns about its potential to disrupt the tech market, contributing to a sharp drop in U.S. stock index futures during early Asian trading on Monday. As of 10:12 a.m. Hong Kong time, S&P 500 futures dropped 1%, while Nasdaq 100 futures fell 1.9%. This ripple effect has extended to the decentralized crypto market, particularly affecting AI-focused altcoins and agents.

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