Bitcoin dropped below $100,000 on Monday, reaching its lowest level in 11 days, as a sharp selloff in technology stocks triggered market-wide caution. Analysts attributed the decline to fears over the growing influence of a Chinese artificial intelligence (AI) startup, DeepSeek, which has raised concerns about competition for Western tech dominance.
At 11:56 GMT, Bitcoin traded at $98,852.17, marking a 6% decrease on the day. Earlier, the cryptocurrency experienced a sharp fall, hitting its lowest point since January 16. This drop follows a rally earlier in the month when Bitcoin surged past $100,000 after Donald Trump’s re-election as U.S. president.
Simon Peters, an analyst at eToro, noted that the losses stemmed from a broader risk-off sentiment driven by developments in the AI sector. “Bitcoin’s losses are seemingly driven by some risk-off sentiment circulating the markets currently due to DeepSeek,” Peters explained.
The emergence of DeepSeek has been described by some industry observers as AI’s “Sputnik moment,” a reference to the Soviet Union’s 1957 satellite launch that sparked the space race. Traders fear the Chinese firm’s rise could undermine the dominance of established Western tech companies, leading to widespread volatility in technology and cryptocurrency markets.
Geoffrey Kendrick, global head of digital asset research at Standard Chartered, said the decline in Nasdaq futures has contributed to Bitcoin’s downturn. He also pointed to investor disappointment over the Trump administration’s initial stance on cryptocurrency.
“Crypto failed to feature in Trump’s day-one announcements after taking office last week, leaving some investors disappointed,” Kendrick said. Although President Trump issued an executive order on Thursday to establish a working group on crypto regulations and explore the idea of a cryptocurrency stockpile, the lack of immediate action left digital asset markets vulnerable.
Additionally, the Securities and Exchange Commission (SEC) announced changes to accounting guidance, which many in the industry argued had previously hindered cryptocurrency adoption.
The cryptocurrency market has also been impacted by broader economic concerns, with fears that interest rates may remain elevated for a longer period. Higher rates often weigh on riskier assets, including cryptocurrencies, as investors seek safer options.
Despite recent setbacks, market experts remain optimistic about Bitcoin’s long-term prospects. However, the latest turbulence underscores the cryptocurrency’s susceptibility to global market dynamics and shifting investor sentiment.