Bitcoin and Nvidia Crash on China DeepSeek AI Threat

Bitcoin and Nvidia Crash on China DeepSeek AI Threat

Bitcoin's price sank sharply on Monday as DeepSeek, a Chinese AI startup, revealed its cost-efficient DeepSeek R1 model, rattling Big Tech and pushing the Nasdaq down 3.5%. Nvidia led losses with a 15% drop, while Bitcoin fell from $105,000 to a low of $98,000, triggering $966 million in liquidations.

Standard Chartered’s Geoffrey Kendrick suggested the market correction was fueled by overblown expectations around President Trump’s crypto policies and the broader tech sector’s downturn. “Buy the dip,” Kendrick wrote, stating the worst may be over after a 10%-20% market repricing.

Analysts expect volatility to persist, with institutional participation likely driving a recovery. Paul Howard of Wincent forecasted, "The next wave up will likely come from organic participation from institutions in the next 3-4 months," pointing to long-term optimism for BTC despite short-term uncertainty.

‍

Layer 2 Abstract Chain Goes Live on Ethereum Mainnet

Abstract Chain, an Ethereum Layer 2 network developed by Igloo Inc., the parent company of Pudgy Penguins, officially launched on the mainnet on January 27. Built using ZKsync’s zero-knowledge rollup technology, Abstract promises low transaction costs and high scalability to support user-friendly Web3 applications.

The chain also introduced a consumer blockchain platform called "The Portal," enabling users to set up wallets using just an email address and access over 100 dApps. CEO Luca Netz highlighted Abstract's mission to simplify blockchain, stating, "The launch of Abstract is more than just a technical milestone—it’s a shift in how everyday users – and not just crypto natives – experience blockchain."

‍

Mode Launches Subnet for Crypto Price Prediction on Bittensor

Ethereum Layer 2 project Mode has introduced Synth, a new subnet on the Bittensor blockchain constructed to apply AI for predicting crypto price volatility. Synth operates as a decentralized marketplace where miners generate simulated price paths for assets like Bitcoin, evaluated by subnet validators for accuracy against historical data.

Synth focuses on applications in options trading and portfolio management, incentivizing accurate financial forecasting models. “Synth marks a huge leap forward in enabling AI agents to better model the volatility of asset prices,” said Mode co-founder James Ross. This development aligns with Mode's broader mission of building infrastructure for AI financial tools within Optimism’s Superchain.

‍

Ripple Recieves New Money Transmitter Licenses in the US

Ripple has obtained Money Transmitter Licenses (MTLs) in New York and Texas, enabling compliant cross-border payments for financial institutions and crypto businesses. These licenses bring Ripple’s global MTL count to over 55, supporting its growth under the Trump administration’s pro-crypto regulatory shift. Meanwhile, its native XRP token has fallen below $3.00 during the widespread market crash.

Joanie Xie, Ripple’s Managing Director for North America, highlighted the demand for faster, cost-efficient payment solutions, stating, “We’re continuing to see more interest from financial institutions to crypto businesses.” Ripple’s expansion includes new products like its RLUSD stablecoin and increased hiring in the US, with 75% of open positions now based domestically.

‍

Data of the Day

The number of Bitcoin wallets with balances exceeding $100 has surged by 25% over the past year, nearing 30 million, according to Binance. This growth reflects a wave of new market participants and heightened optimism in the cryptocurrency sector.

Historical spikes in wallet counts align with bull markets, such as Bitcoin surpassing $100,000 in 2024 and the approval of spot Bitcoin ETFs. Binance noted, “This trend reflects an influx of new participants into the market, signaling renewed interest and optimism for the cryptocurrency.”

‍

More Breaking News

• MicroStrategy adds 10.1K Bitcoin to its holdings, raising its total to 471,107 BTC, and announces a $250M preferred stock sale for further acquisitions.
• CFTC acting chair Caroline Pham launches roundtables on crypto and prediction markets, signaling a more open regulatory stance following Trump’s inauguration.
• Bitpanda, OKX, and Crypto.com secure MiCA licenses, gaining access to a 450-million-strong European market under streamlined regulatory frameworks.
• Poland surpasses El Salvador in Bitcoin ATM count, becoming the fifth-largest global hub with 219 active machines after a four-month installation spree.
• Elon Musk opposes Roger Ver’s pardon request, arguing that Ver’s renounced US citizenship disqualifies him for clemency despite crypto community appeals.

For the latest updates on digital asset markets, follow us on X @Datawalletcom.