Crypto Market Crash: 850 Million Dollars Wiped Out

27-01-2025 By: Surbhi Jain
Crypto Market Crash:

Crypto Market Crash: DeepSeek Launch To Be Held Responsible

Crypto Market Crash: What Are The Factors Responsible

The crypto market dropped substantially today, and the factors are being studied. Today’s market drop is being considered the first flash crash of the year 2025 for the crypto market, as over $269 billion were wiped out.

Crypto Crash Details 

On Monday, Bitcoin (BTC) as well as most altcoins registered significant double-digit declines. While the crypto crash wiped $850 million in leverage positions across the market, it swept away $269 billion from overall capitalization.

The crash is notable also because it was the first of its kind since Donald Trump, the US President, took his place in the White House. 

Over the past 24 hours, $850M have been lost by the crypto leverage traders collectively in liquidations. Here, the long traders have been reported to have experienced the biggest losses. Bitcoin leverage traders have been among the biggest losers, followed by Ethereum (ETH) traders. It is also known that the memecoin traders were betting heavily after Trump’s inauguration.

The Bitcoin price declined by more than 10%, falling from a daily high of $105,277 to a new multi-week low of $97,785. Ethereum price too recorded a similar slump, as it fell from a daily high of $3,343 to a multi-week low of $3,024.

Memecoins recorded an even broader decline, which includes the popular Dogecoin (DOGE), PEPE and the newly-launched $TRUMP coin.

Why Is Crypto Down Today

Market pundits have many to put the blame on including the overleveraged market, specifically the meme coin sector. However, there are some who are putting the blame on none other than the Chinese AI startup DeepSeek launch, for the crash in the traditional stock  market. As per these, the increasing influence of institutional investors made the crash trickle down to crypto.

Market observers have also tied the crash to the Trump administration apart from the AI bot DeepSeek launch.

DeepSeek Surpasses OpenAI’s ChatGPT

The DeepSeek launch can be seen in focused, traditional companies like Nvidia and crypto AI tokens, where most AI tokens lost more than 20% of their market value within 24 hours. Some even declined between 50-70%.

DeepSeek claimed AI development possibilities without massive investments required. It’s been built with chips that cost just a fraction of what the US AI companies are spending. This went on to putting the company at the top position on the Apple App store in terms of downloads. 

Having surpassed OpenAI’s ChatGPT in ranking and made such claims, DeepSeek is now posing a serious threat to the US tech giant as well as other tech-driven AI companies on the globe. The threat is on the US AI dominance.

The Trump administration is also known to have focused on advancing crypto and AI. The President had announced $500 billion investment in the American AI ecosystem, further going ahead signing several pro-crypto executive orders and tying the two tech sectors together.

Also read: Brazil Halt to Worldcoin’s Biometric Data Collection Practices
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