Seeds of Wisdom RV and Economic Updates Monday Evening 1-27-25
Good Evening Dinar Recaps,
DEEPSEEK AI DEBUT SPARKS CRYPTO MARKET SELL-OFF AMID RISING TECH COMPETITION
The release of DeepSeek, a Chinese artificial intelligence (AI) model designed to rival OpenAI's ChatGPT, triggered a sell-off in U.S. tech stocks, bringing crypto down too. But analysts say cheaper AI may actually be good news for the space.
This advanced model is reportedly faster and cheaper than its American counterpart, offering features such as natural language processing and integration capabilities that position it as a direct competitor in the global AI arms race.
Cheaper AI models benefit both crypto and broader AI consumers by lowering the cost barrier to access advanced AI tools.
Over the past 24 hours, Bitcoin (BTC) fell by 4% to $100,000, while Ethereum (ETH) dropped by 6% to $3,100. Meanwhile, the total market capitalization of cryptocurrencies fell by 8%, dropping to $3.52 trillion, according to CoinGecko. Liquidations over the past 24 hours totaled nearly $1 billion, according to CoinGlass.
Knee-Jerk
The debut of DeepSeek, coupled with intensifying competition in the AI sector, is reshaping investor sentiment across both tech stocks and the cryptocurrency market. Investors are selling riskier assets as they take time to digest this new information and how it might affect their holdings.
Jean Rausis, co-founder of decentralized finance ecosystem SmarDex, noted that the drop in crypto prices is more of a knee-jerk reaction to tech news rather than a direct consequence of the DeepSeek release itself.
“Because crypto trades 24/7, it’s often the go-to when big tech news breaks and the US market is closed – even if it has nothing to do with Bitcoin or other cryptocurrencies,” Rausis said.
Crypto’s strong correlation with the Nasdaq underscores its position within the same investment category as tech stocks, Rausis added, explaining that both markets often respond similarly to major news due to shared investor sentiment and overlapping liquidity sources.
“Investors in crypto share the same mindset as tech stockholders, and the liquidity sources are often the same, so they often move in tandem when big tech news breaks,” he said. “It doesn’t really have anything to do with fundamentals – just sentiment.”
Long-Term Positive
Despite the initial panic, Rausis believes competition in AI is ultimately positive for consumers and aligns with crypto’s ethos of decentralization. “For traders, this volatility could just be an opportunity to buy in at a lower price,” he said.
Anthony Pompliano, Founder & CEO of Professional Capital Management, echoed Rausis’ sentiment in a post on X this morning. He said that while DeepSeek’s launch sparked uncertainty and volatility in the market, broader access to AI should be long-term positive.
“More companies are able to leverage the technology to create economic activity and drive GDP growth,” Pompliano wrote. “Individuals should be able to save time and become more effective at their jobs. And more problems will be solved. So Deepseek’s innovation will drive more use of AI, rather than less. This is all positive on a macro basis.”
Fake DeepSeek Token
Amid the market drop, a fraudulent token claiming ties to DeepSeek briefly surged to a $48 million market cap on Solana, only to plunge to $6 million, according to Bird Eye. Created weeks before DeepSeek’s release, the token exploited the hype surrounding the AI model.
“DeepSeek has not issued any cryptocurrency,” the team stated, clarifying that it operates only one verified X account.
@ Newshounds News™
Source: The Defiant
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BRICS TO INTRODUCE BITCOIN RESERVE? US EXPERT SAYS ITS POSSIBLE
Both the BRICS alliance and the United States have been engaged in some brewing geopolitical conflict over the last month. With US President Donald Trump eyeing a steep 100% tariff threat, all eyes are on what the bloc could do. Moreover, with both sides looking to continue their growth in the digital asset class, one expert says BRICS could be set to introduce its own Bitcoin reserve.
The news follows the announcement that the US would be introducing its own cryptocurrency stockpile. Although it is not the strategic BTC reserve many had hoped, it still will see the country firmly embrace the asset class. In response, one expert notes that the global south could turn to the leading cryptocurrency by market cap.
BRICS Bitcoin Reserve a Possibility as Nations Begin Cryptocurrency Embrace
The United States has firmly embraced cryptocurrencies since Donald Trump was inaugurated last week. Indeed, he has already ordered the asset to become a “national priority.” Meanwhile, speaking at the World Economic Forum, he claimed the country would soon become the “world capital” of AI and crypto.
That has led many to theorize what the rest of the world could do. Specifically, a host of nations are seeking to also implement similar action. Chief among them is the BRICS alliance, which one expert says could turn to create its own Bitcoin reserve.
US Space Force officer Jason P. Lowery recently took to X (formerly Twitter) to discuss the prospects. Specifically, he discussed the economic alliance’s prospects for its own cryptocurrency initiatives. However, he noted one token remained key.
“Do you really think BRICS is interested in adding a meme coin to their reserves, or one controlled by an American CEO?” Lowery said of crypto options like XRP. “Do you believe they’d choose a USD stablecoin issued by an American company trying to position itself as a neo-Federal Reserve Bank?” he further questioned.
“Or are they far more likely to adopt the coin that has been relentlessly vilified and condemned by the US for over 15 years?” he added. “That coin guarantees covering access to block space, ensuring transactions cannot be censored or denied, provided they continue to possess the physical power and infrastructure ‘they’ve already invested in."
This echoes similar sentiments made by Russian President Vladimir Putin himself. The leader applauded Bitcoin. Moreover, he noted that it is an asset that cannot be controlled. As the bloc has struggled against sanctions and US dollar weaponization, this seems increasingly important.
@ Newshounds News™
Source: Wattcher Guru
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