China’s Deepseek Launch Crashed the Stock Market and Crypto

Welcome to Boztech Blogs! Let’s look into what’s happening in the world of tech and finance today. As usual, Bitcoin (BTC) is going on a ride, but this time, it’s heading south. Yes, you read that right, BTC has hit a low that many didn’t see coming, and it’s all because of a surprising new player in the AI game. Let’s break down why the stock market is tumbling and why Bitcoin and other cryptocurrencies are feeling the heat.

China’s ‘Deepseek’ launch 

So, here’s the twist: China just launched a new AI tool called Deepseek, and it’s causing a storm in the tech world. Deepseek was introduced as a direct competitor to OpenAI, the company behind ChatGPT, which has been the top AI platform for a while now. But here’s the kicker, Deepseek’s success has been nothing short of explosive.

Within just two days of its launch, Deepseek topped the charts on the App Store. And the real shocker? It’s faster, more efficient, and according to many experts, more powerful than OpenAI. All of this, created for a fraction of the cost, only $6 billion. Meanwhile, OpenAI’s ChatGPT cost 17.8 billions in investment and years of development suddenly seem like a big gamble.

The ripple effect on the US stock market

Now, why is this such a big deal? Well, for years, the US has been leading the charge on AI technology. Huge investments were poured into OpenAI, with investors confident that the US would continue to dominate the space. But with Deepseek’s launch, that confidence quickly crumbled.

As Deepseek showed it could outpace OpenAI, investors started to question everything. How could something so powerful be created for so little? They began pulling their money out of the US stock market, particularly from tech stocks. This panic selling sent shockwaves through the entire market, causing stocks to plummet. The once stable tech sector was now in doubt, and investors quickly realized that they were no longer sure where to place their bets.

Bitcoin and Crypto take a hit

As if the stock market wasn’t enough, the crypto market also took a massive hit. Bitcoin (BTC), which had been riding high for months, saw a dramatic dip. It even touched an unbelievable low of $99.

But why did this happen? When the stock market crashes, investors often turn to Bitcoin and other cryptocurrencies as a safe haven. But with the uncertainty surrounding Deepseek’s launch and the global financial instability, even crypto investors weren’t immune. Panic selling took hold, and Bitcoin along with many altcoins started to drop in value.

For traders involved in futures and spot trading, it was a nightmare. Many lost everything in the blink of an eye, unable to recover from the sudden market plunge.

Investors are in doubt

So, what’s the underlying issue here? Greed. For years, American investors believed that their massive investments in OpenAI would keep them at the top. They saw AI as the future and assumed that no one could touch their dominance. But Deepseek’s emergence threw that entire belief into doubt.

Deepseek was developed at a fraction of the cost, only $6 billion, showing that sometimes the best innovation doesn’t require endless funding. The greed of investors who poured billions into OpenAI, thinking it was untouchable, is now being challenged. This uncertainty is what caused many investors to pull their money out of the stock market.

The Trump & Melania coin tactic 

On the other hand, there’s also another growing issue that’s been shaking the crypto market. As many of you know, the much-anticipated launch of Trump and Melania’s coins created a huge buzz. People believed these tokens could potentially become the next Bitcoin, especially after Trump took his presidential oath and immediately launched his coin, followed by Melania’s. Investors were eager, thinking these coins might be a game-changer, and started selling off their Bitcoin, Ethereum, Solana, and other altcoins to jump in. Click here if you want to read about the Trump and Melania coin. 

But what happened next was a classic case of a market manipulation tactic. People poured their funds into the Trump and Melania coins, only to realize that it was all a clever distraction. As the market began to crash, altcoin prices dropped significantly, and in a surprising twist, Trump and his team swooped in, purchasing all those cheap altcoins once the volume was low. 

This goes to show the dangers of chasing quick profits out of greed. Investors, hoping for a shortcut to massive gains, ended up selling their holdings at a loss. Why? Because Trump’s team engineered a situation where they could buy up these undervalued altcoins, taking advantage of the panic they had helped create.

What should you do now?

The lesson here is clear: never let greed cloud your judgment. The market is full of distractions, so it’s crucial to focus on the long-term value of your investments instead of chasing the latest hype.

If you’ve experienced losses in the stock or crypto markets, here’s some advice: Don’t panic sell. While it’s tempting to cut your losses during a downturn, doing so could lock in those losses. Instead, hold your investments and wait for the market to stabilize before making major moves.

Proper research is essential in investing and trading. The markets are unpredictable, and events like the Deepseek launch show how quickly things can change. Make sure you understand the risks before diving in, and be prepared for anything that comes your way.

Wrapping up

China’s launch of Deepseek has turned the tech world upside down and sent ripples through both the stock market and the cryptocurrency market. As investors pull back, Bitcoin and other cryptocurrencies have been caught in the crossfire. The once secure belief that the US was leading the AI race is now in question, and that uncertainty has caused massive sell-offs in both traditional stocks and digital assets.

For more updates and insights into the world of tech and finance, follow Boztech! We’ve got all the latest news and analysis you need to navigate these turbulent times.