Key Points
- Despite a tech stock market crash affecting Nvidia, analysts maintain a positive outlook on Bitcoin’s future.
- DeepSeek’s AI model launch has caused a ripple effect in the tech and crypto markets.
The tech industry is currently experiencing significant turbulence due to the introduction of DeepSeek’s AI model, which is directly competing with OpenAI’s ChatGPT. This development has caused a significant downturn in the tech stock market, affecting the crypto market as well. Despite these circumstances, market experts maintain a positive outlook on the future of Bitcoin (BTC).
This situation has had a profound impact on the tech-related stock market, leading to a historic $600 billion loss in the U.S. tech sector, as reported by The Guardian. In response to this, President Donald Trump has labeled this event as a “wake-up call” for American industry and has advocated for a renewed push for innovation.
Nvidia’s Fall and Its Effect on Crypto
Nvidia, a prominent stock in the tech sector known for its leadership in AI and computing innovations, experienced a nearly 17% drop in the last 24 hours. The crypto industry was not immune to this downturn, as evidenced by BTC dropping below $100K on Jan. 27, which led to a decrease in the altcoin markets.
The AI crypto sector also experienced a significant loss, with a 12% decrease. Arthur Hayes of BitMEX had previously speculated that investors would shift away from the U.S. market and seek refuge in global options like crypto. This sentiment has now been echoed by other analysts. According to a report by 10x Research, despite the current turbulence in the crypto market, BTC is expected to recover. The report also suggests that the current situation will attract more investors towards BTC and other decentralized assets. Matrixport, a financial hub operating in the Asian market, has also expressed similar views.
Bitcoin’s Resilience Amid Nvidia Stock Volatility
Markus Thielen, the CEO of 10x Research, has suggested that Wall Street-backed Bitcoin ETFs will help BTC maintain low volatility. He has also highlighted BTC’s relationship with the U.S. dollar, stating, “Bitcoin tends to go higher the U.S. dollar goes. It is evidence that more currency is flowing into the U.S., and some of it trickles into Bitcoin.”
According to Thielen, global liquidity, currently at $38 trillion, is driving BTC’s price rather than tech market instability. On a podcast, Thielen argued that BTC’s price action is independent of the tech sector and is more responsive to global liquidity and Federal Reserve policy.
Thielen stated that Bitcoin ETF inflows resumed after the September FOMC meeting following a period of sideways movement. He added that after the Dec. 2024 CPI data was released on Jan. 15, 2025, investors gained more confidence in BTC’s position.
Thielen believes BTC’s price could reach between $130,000 and $190,000 during the current bull market cycle. However, Bitcoin ETF outflows seem to tell a different story.