The release of DeepSeek R1 is major. Like darn major... but it's not just that. I will take a short dive into each cause I think is noteworthhy
DeepSeek R1 firstly...
DeepSeek R1, from a Chinese AI lab, got released and caused major turbulence. Why is it major and what have it got to do withbthe crypto market?? Good question...
First what i deepseek R1
In short... its an AI model and got
Very high performance & Less dependent on GPU
Plus, It is low cost (with even open source approach) while OUTPERFORMING GPT 4o, Claude, Llama, and more... at around 95% less cost 👀🤯🤯 yes you read that right...
So what have this led to?
led to a sell-off in AI tokens, particularly those heavily exposed to GPU technologies, as investors recalibrate their expectations and risk assessments.
This has led to what some describe as 'trading paralysis,' where investors are holding back, waiting for clearer market signals or more favorable conditions. This lack of trading activity is indicative of *FUD in the market, with many investors possibly cashing out or reallocating funds, leading to price drops. The anticipation of a tech-selloff in broader markets, particularly with US markets closed, might have prompted crypto markets to front-run these expected declines.
The Federal Reserve is in play too...
The Fed's throwing us a curveball with fewer rate cuts than we hoped for in 2025. That's tightening the liquidity, which isn't great news for risk-taking in crypto. Plus, with Trump's crew coming into play, there's a lot of speculation about what this means for crypto regulation. Will it be a boom or a bust for altcoins? Only time will tell. And don't get me started on $TRUMP
Just a healthy correction? 🔄
After the wild ride of 2024, maybe this dip is just the market taking a breather. $BTC and $BNB and more... had some serious gains, and these corrections are like the market's way of saying, "Let's not get too carried away." Add in worries about inflation and whispers of a recession, and it's no surprise investors are taking a step back to reassess.
I hope this clears the air a bit...
Before you bash me in the comments, look up the details and tell me of I'm wrong...
Follow me for more 🔥 takes
.
