Why is DeepSeek AI causing a market dump? 🤔💥
Introduction
DeepSeek AI, an innovative AI startup, has taken the market by surprise, shaking both the traditional stock and crypto sectors. Here's why:
What is DeepSeek AI?
DeepSeek AI is an AI startup that has created a ChatGPT-like tool.
Unlike OpenAI, which raised $17B at a $150B valuation, DeepSeek achieved this feat with just $10M, proving efficiency and cost-effectiveness in AI development.
Impact on US Stock Market 📉
1️⃣ AI Investment Overvaluation
The AI hype over the last two years led to over $100B in investments into AI companies.
DeepSeek's success highlights that such companies might be overfunded and overvalued, creating doubts among investors.
2️⃣ Market Reaction
Major AI stocks like NVIDIA plunged 12% as investors reassess valuations.
Broader indices like NASDAQ dropped 5%, signaling a potential bubble burst in AI-related sectors.
Impact on Crypto Market 💹
The crypto market closely mirrors the movements of the US stock market:
BTC and Altcoins Dump
▪️As traditional markets tumble, crypto markets follow suit, causing BTC and altcoins to lose value.
▪️Investors perceive both markets as risky assets, leading to sell-offs during uncertainty.
Key Question: Has the AI Bubble Burst? 💥
DeepSeek’s lean funding model challenges the existing AI funding frenzy.
If investors continue to doubt the value of highly funded AI firms, the US stock market bubble might deflate, dragging down associated sectors, including crypto.
Your Take?
Do you believe this is a temporary market correction, or has the AI-driven rally come to an end? Share your thoughts✌
