Bitcoin Drops Below $100K as AI App DeepSeek Rattles Tech Market Confidence

Bitcoin and crypto prices have sharply fallen, coinciding with a broader stock market sell-off triggered by the rise of China-based artificial intelligence app DeepSeek.

Bitcoin has dropped below $100,000, retreating from its previous all-time high of nearly $110,000, seen just before Donald Trump’s inauguration.

In the midst of this downturn, Arthur Hayes, a prominent crypto trader and cofounder of BitMex, has warned of an impending “financial crisis” that could prompt the Federal Reserve to implement fresh stimulus measures.

Hayes predicts a $70,000 to $75,000 correction for Bitcoin, coupled with the mini-crisis, which could trigger significant price movements.

The recent volatility follows a surge in Bitcoin prices driven by Trump’s election victory, which led to optimism about his pro-crypto policies. Trump’s administration has already prioritized crypto policy reform, including the creation of a cryptocurrency working group.

However, the rise of DeepSeek, an AI app that competes with OpenAI’s models, has rattled investor confidence in high-growth tech stocks, which have heavily influenced Bitcoin and crypto prices.

The correlation between Bitcoin and the U.S. stock market has become more evident as both markets react to the same risk factors, such as AI advancements and broader economic concerns.

Analysts, including Adam Kobeissi, have pointed to the growing “risk-off” sentiment, with DeepSeek’s success shaking investor confidence in tech stocks and, by extension, cryptocurrencies.

Looking ahead, Hayes believes that the Federal Reserve will resume money printing, which could send Bitcoin’s price soaring to $250,000 by the end of the year, despite the current market downturn.