DeepSeek Shocks the Market with New AI Model
29 January 2025
Every week, Amdax summarizes what's happening in the crypto market for you. Want to learn more? Click through for further insights.
This newsletter is a co-production with our partner Bitcoin Alpha.
Stay informed in three steps:
1. New Cost-Efficient AI Model Disrupts Financial Markets
Financial markets opened the week in the red following the introduction of DeepSeek’s new AI model from China. The model can deliver performance on par with OpenAI’s leading systems—at just one-tenth of the cost. This development triggered declines in major chip stocks and was reflected in broader stock indices and the crypto market.
2. Bitcoin Mostly Moves Sideways
The "DeepSeek crash" also impacted bitcoin’s price, which dropped by 7% overnight from Sunday to Monday, briefly touching $98,000. Over the following days, the price cautiously climbed back above $100,000. Zooming out, bitcoin has mostly been trading sideways since its rally late last year. The question remains: when will the upward trend resume?
3. Altcoins Take a Bigger Hit
It's a familiar pattern: when bitcoin declines, altcoins tend to fall even harder. This was evident at the start of the week, as the broader altcoin market trended downward, with only a few exceptions. Given the strong gains seen in November and early December, this correction in altcoins is hardly surprising.
Signal out of the noise:
Amdax's take:
DeepSeek’s groundbreaking AI model has shaken the industry, raising doubts about the profitability and valuations of major AI firms. This uncertainty has rippled into the crypto market in the short term. However, in the long run, this development may have little impact on most crypto assets, as crypto isn't directly tied to AI.
Behind The Scenes
Sonic (formerly Fantom) is a blockchain platform designed to build decentralized applications (dApps), support DeFi, gaming, NFTs, and more.
The rebrand goes beyond just a name change—it includes speed and security upgrades to the network. Trading Sonic (S) is now available via the Amdax app and web platform.
We use cookies to personalize content and advertisements, to offer social media features and to analyze our website’s traffic. We’ll also share information about your usage with our partners for social media, advertising and analysis. These partners can combine this data with data you’ve already provided to them, or that they’ve collected based on your use of their services.