The introduction of DeepSeek into the cryptocurrency market has had a profound impact, resulting in a significant downturn across various sectors.
Companies involved in crypto mining suffered losses, and the overall market experienced heightened levels of volatility, leading to a widespread decline.
DeepSeek’s Influence on BTC and ETH ETF
Even the conventional Bitcoin [BTC] and Ethereum [ETH] ETFs, which saw an influx of $1.9 billion at the start of Donald Trump’s second presidential term, were affected by the recent developments.
The disruption caused by DeepSeek resulted in a shift. Bitcoin ETFs experienced an outflow of $457.6 million, and Ethereum ETFs saw a decline of $136.2 million, as reported by Farside Investors.
This impact was also felt in the ETP market.
James Butterfill, CoinSharesCo’s Head of Research, commented on the situation,
“Yesterday’s market downturn triggered by the DeepSeek news led to a sense of panic among investors, resulting in withdrawals of US$442m from Bitcoin and US$99m from Ethereum.”
Resilience of Ripple’s XRP
During a period of significant selling pressure in the cryptocurrency market, total ETP outflows exceeded $534 million, causing concerns among investors.
While there was a rush to sell Bitcoin and Ethereum, XRP demonstrated resilience against the prevailing market sentiment. Despite an initial decline, XRP quickly recovered and attracted $2.1 million in ETP inflows on the same day.
High-net-worth wallets were observed accumulating 120 million XRP during the market downturn, indicating that strategic investors viewed the decline as an opportunity rather than a reason to panic sell.
Amid the chaos surrounding DeepSeek’s debut, the crypto mining industry encountered its second consecutive day of losses.
Companies like Riot Platforms (RIOT), Cleanspark (CLSK), and MARA Holdings (MARA) all experienced declines, reflecting the prevailing uncertainty in the wider market.
The cryptocurrency market as a whole also suffered, with the global market cap declining by 0.65% in the last 24 hours according to CoinMarketCap.
Correction in U.S. Stock Markets
In contrast, prominent U.S. tech stocks, such as Nvidia, Apple, and Amazon, staged a strong recovery, reversing some of the losses incurred in the previous trading session.
Sharing further insights on this development, the Kobessi Letter highlighted,