Last week saw a significant drop in crypto inflows, affecting not just the crypto market but also AI-related stocks.
Sharp Decline in Crypto Inflows
Crypto inflows dropped to $527 million last week, contrasting with nearly $2 billion seen in past weeks. This decline was primarily due to the hype surrounding DeepSeek AI, affecting liquidity in both digital assets and stock markets. According to CoinShares, although there were positive inflows into digital assets, their volume was significantly lower than previous figures.
Impact on Other Markets
The liquidity shift affected more than just crypto. AI-related stocks like Nvidia and mining companies also felt the impact. This led to wavering market confidence and increased uncertainty. Despite this, Bitcoin stood out for its resilience, attracting $486 million in inflows, indicating ongoing interest from investors.
Market Recovery and Expert Opinions
Later in the week, the market began to recover, with over $1 billion in new inflows. However, this was still below the previous levels of nearly $2 billion per week. A user on X, Emily, noted: "DeepSeek vibes are definitely shaking things up," highlighting the uncertainty in the industry. Lennix Lai from OKX commented on the situation, mentioning that while DeepSeek caused a short-term shock, escalating trade tensions are a bigger concern.
Global economic factors, including trade tensions and US jobs data, will continue to influence investor behavior. Despite current volatility, long-term crypto investors retain confidence in the industry's future.
