The U.S. stock market faced an unexpected decline, leading to multibillion-dollar losses across various sectors. The emergence of the Chinese startup DeepSeek with its innovative AI model is cited as a primary cause.
What Factors Led to This Stock Market Collapse?
The U.S. stock market collapse was driven by instability caused by DeepSeek, a Chinese startup offering innovative AI solutions. This development cast doubts on the reliability of larger tech companies, prompting investors to sell off their shares, resulting in substantial losses. According to StockTwits, the market lost trillions. Major companies like NVDA and Microstrategy saw their shares decline by 3% and 5% respectively, with the NASDAQ 100 index dropping by 236 points in one session.
How Is the Cryptocurrency Market Responding?
The stock market's decline also affected the cryptocurrency market, which fell by 7% in overall value. Bitcoin's value dropped by 5%, and many altcoins saw decreases of 8-10%. Ethereum, XRP, and Solana were among the most affected. Some experts advise against panic selling, suggesting that the current downturn could present an opportunity to purchase assets at lower prices.
Expert Opinions and Prospects
Experts warn that the success of DeepSeek's model may increase competition in the AI sector and add uncertainty to the valuation of tech stocks. The current situation requires vigilance and strategic adjustments for investors. Some specialists believe cryptocurrencies are still seen as high-risk assets.
The path forward for stock and cryptocurrency markets remains uncertain. Vigilance and strategic planning will be necessary for investors to navigate this turbulent environment successfully.
