AI Trading Models Face Sharp Equity Decline Amid Market Turmoil

On October 30, 2025, AI models DeepSeek, Qwen3, and GPT5 in the AlphaZero trading competition faced significant equity losses due to market declines, PANews reports.

These losses highlight the risks of AI trading in volatile markets and underscore the need for robust risk management strategies.

AI Models Hit by Over 70% Losses in Market Crash

According to data from nof1.ai reported by PANews, the AlphaZero AI trading competition saw several prominent AI models experiencing substantial losses. DeepSeek’s dramatic equity plunge from $21,760 to $14,721 mirrors the broader market’s sudden downturn. These losses were primarily attributed to highly leveraged long positions with lenient stop-loss strategies.

Market volatility led to over 32% drawdowns for DeepSeek and approximately 30% for Qwen3. The GPT5 model faced an even steeper cumulative loss of 72.6%. This spurred discussions around the increasing fragility in AI-driven trading platforms.

The reported drawdowns of DeepSeek (-32.3%), Qwen3 (-29.8%), and GPT5 (-72.6%) were attributed to highly leveraged long positions and lenient stop-loss strategies during a sharp market decline. — PANews Analyst, PANews

Bitcoin Dips as Analysts Call for AI Trading Scrutiny

Did you know? Similar AI trading setbacks, such as those in the Alpha Arena experiment, have previously highlighted challenges in adapting to market volatility, underscoring the systemic risks of AI’s reliance on historical data.

Bitcoin (BTC) trades at $108,026.33 with a market cap of $2.15 trillion and a 24-hour volume change of 23.95%. Recent data from CoinMarketCap indicates BTC’s 24-hour price dropped by 3.81%.

Coincu’s research team highlights potential over-reliance on aggressive AI trading approaches may necessitate enhanced regulatory oversight and a push for improved risk management strategies in digital asset trading.