Crypto Market Faces Turbulence Amid Policy Shifts and AI Disruptions$SOL
The cryptocurrency market witnessed an explosive surge, reaching an all-time high of $3.76 trillion on January 7. This rally was largely fueled by landmark policy announcements from President Trump, including the creation of a national crypto reserve, a directive to establish a stablecoin framework within 180 days, and a decisive ban on a U.S. central bank digital currency (CBDC). Adding to the market’s enthusiasm, Eric Trump proposed the elimination of capital gains taxes on cryptocurrency, sparking widespread optimism among investors.
However, the momentum was short-lived. By the end of January, the market took a sharp downturn following the unexpected launch of DeepSeek’s revolutionary AI model. The disruptive technology sent shockwaves through both the tech and crypto sectors, triggering panic selling and wiping out billions in market value. This sudden decline raised serious concerns about overinflated valuations and the growing influence of artificial intelligence on digital assets.
As February unfolds, the financial landscape remains highly volatile. Uncertainty looms over potential U.S. tariff adjustments, sending ripples across global markets. With risk assets under pressure, investors are left questioning whether the crypto market will rebound or if further turbulence lies ahead. Will this be a temporary correction, or is the sector facing a more significant shift?
