### **1. DeepSeek shakes up the global technology market**

- **Context**: DeepSeek, a Chinese AI startup, announces the large language models **DeepSeek V3** and **R1** with a training cost of only $5.58 million, 96.4% cheaper than OpenAI. This raises questions about the dominance of U.S. companies like Nvidia, OpenAI, Meta in the AI field.

- **Direct impact**:

- **U.S. tech stocks plummet sharply**: Nvidia down 10% in value, Nasdaq 100 loses 5.2% on 01/27, resulting in a market capitalization loss of $1.2 trillion.

- **Ripple effect on crypto**: Bitcoin drops 5-6%, falling below $100,000; AI-themed coins like Render and Filecoin also plummet.

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### **2. Underlying causes from market sentiment**

- **The connection between AI and crypto**:

- AI projects in crypto (like DeFAI, AI Agent) depend on the U.S. LLM platform (GPT, Claude). The rise of DeepSeek raises concerns about the sustainability of these projects.

- The risk-averse mentality spreads: Investors are concerned about the overvaluation of U.S. tech stocks, leading to capital withdrawal from crypto to offset losses.

- **Impact from AI forecasts**:

- DeepSeek is integrated into market analysis tools, providing pessimistic forecasts about FED interest rates and monetary policy, triggering massive sell-offs.

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### **3. Opportunities and challenges for crypto from DeepSeek**

- **Open source and application potential**:

- DeepSeek R1 is open source, allowing for the development of AI Agents in DeFi at low costs, fostering innovation and reducing dependence on OpenAI.

- For example: AI Agent projects can leverage DeepSeek to optimize automated trading, manage portfolios, or analyze on-chain data.

- **Short-term risks**:

- The emergence of DeepSeek reduces the demand for high-end AI chips (like Nvidia's), indirectly affecting GPU-based crypto projects (Render, Akash Network).

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### **4. Political and regulatory factors**

- **Trump administration's policy**:

- Although Trump supports crypto (establishing a working group on digital assets), the lack of mention of crypto in the inauguration speech (01/20) disappointed the market.

- The executive order on 01/23 regarding crypto regulation is expected to create a clear legal framework, but in the short term, it causes volatility due to lack of details.

- **U.S.-China competition**:

- DeepSeek demonstrates that China can develop world-class AI despite chip restrictions. This prompts the U.S. to increase investment in AI (Stargate project $500 billion), indirectly supporting the related crypto ecosystem.

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### **5. Trend forecast for 2025**

- **Short-term**:

- Crypto continues to fluctuate due to correlations with the stock market and reactions to macroeconomic data (FED interest rates, CPI).

- AI-themed tokens may recover if they can leverage open-source technology from DeepSeek.

- **Long-term**:

- The development of low-cost AI promotes practical applications in DeFi, NFT, and DAO governance.

- Regulatory clarity from the Trump administration could attract institutional investment into crypto.

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**Conclusion**:

DeepSeek is not only a "technology shock" but also a catalyst for structural change in the crypto market. In the short term, it increases volatility due to panic sentiment, but in the long term, open-source technology and global AI competition could usher in a new era for decentralized applications. Investors need to closely monitor FED movements, cryptocurrency policies from the White House, and the pace of AI integration into blockchain.