Did DeepSeek cause crypto to plunge?
Did DeepSeek cause crypto to plunge?
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A sharp fall in the value of bitcoins has been attributed to DeepSeek AI, which is also linked to a fall in tech stocks. This market impact is largely thanks to DeepSeek being perceived as highly disruptive in its ability to operate at lower costs, with much lower power overheads, than OpenAI’s ChatGPT and other generative AI models.
![[What is DeepSeek, the Chinese AI app shaking up the tech market?]](https://static.standard.co.uk/2025/01/28/09/28-8bbb47bf976b48b5bc21beb210a8bdce.jpg?crop=8:5,smart&quality=75&auto=webp&width=960)
Nvidia stocks dropped by almost 17 per cent following the release of DeepSeek AI’s V3 and open-source R1 AI models. Bitcoin’s drop in value was much less severe, but still saw a fall from highs on January 26 of $84,415 (£67,794) to a low of $78,717 (£63,215) the next day.
![[OpenAI boss Sam Altman praises Chinese rival DeepSeek's R1 model as 'impressive']](https://static.standard.co.uk/2023/11/20/09/16-91096abbf81d485fa3cd897136a743a1.jpg?crop=8:5,smart&quality=75&auto=webp&width=960)
Follow the Standard’s live blog for the latest updates on DeepSeek. That is roughly a seven per cent drop in value, although bitcoin pricing has since stabilised, currently sitting at around one per cent lower than the January 26 valuation. While Bitcoin may not be impacted by a cheaper-to-use chatbot in the way Nvidia is, its value was still pulled down following market-wide declines including a three per cent Nasdaq dip.
![[Donald Trump: DeepSeek's AI should be 'wakeup call' to US tech industry]](https://static.standard.co.uk/2025/01/28/8/00/trumpdeepseek280125.jpeg?crop=8:5,smart&quality=75&auto=webp&width=960)
The DeepSeek app for iPhone has unseated ChatGPT at the top of the free iPhone apps chart and, with a registered account, can be used much like the ChatGPT app. Its usefulness goes beyond that, too, as DeepSeek claims the computational power required for its AI calculations is only a fraction of that of its rivals. This, in turn, has led to much lower costs for those wanting to use DeepSeek AI in their own software.
![[DeepSeek AI model sends shockwaves through US tech firms as stocks plunge]](https://static.standard.co.uk/2025/01/28/08/11160937-db39a22a-3aa6-4a11-83ba-876fb4e2f5f6.jpg?crop=8:5,smart&quality=75&auto=webp&width=960)
AI companies charge by input and output tokens, the building blocks of information put in and generated, by AI. OpenAI currently charges up to $10 (£8) for one million output tokens, compared to 28 cents for DeepSeek’s chat model (the non-promo price will eventually be $1.10, or 88p), and $2.19 (£1.76) for the company’s more involved AI-reasoning model.
