Bitcoin and the broader cryptocurrency market have experienced a sharp decline, coinciding with a sell-off in global stock markets, primarily driven by the growing concerns surrounding China-based artificial intelligence (AI) app DeepSeek.
The drop has seen Bitcoin fall below $100,000 per coin, a significant dip from its all-time high of nearly $110,000, which occurred just before US President Donald Trump’s inauguration.
This downturn comes amid rising uncertainty about global economic conditions, including inflation concerns and the future actions of the US Federal Reserve. While Bitcoin had enjoyed a surge in popularity due to discussions surrounding its potential to challenge gold’s market value, the current price correction has sparked predictions of a broader financial crisis.
Arthur Hayes, a prominent figure in the crypto industry and cofounder of BitMex, has warned that a “mini financial crisis” could be on the horizon. Hayes suggests that this could prompt the Federal Reserve to resume stimulus measures, such as money printing, which he believes could eventually drive Bitcoin’s price back up, possibly reaching $250,000 by the end of the year.
Bitcoin and other cryptocurrencies have become increasingly correlated with the performance of high-growth tech stocks, particularly as investments in AI companies have surged. However, the recent rise of DeepSeek, a Chinese AI app that has gained significant traction, has led to concerns that its performance could disrupt the tech sector, contributing to the broader market downturn.
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