Bitcoin Drops Below $100,000 on AI-Stock Selloff
Bitcoin plunged below $100,000 on Monday, reaching its lowest point in 11 days. Analysts link the decline to a wave of caution triggered by the selloff of Western AI-related stocks.
Bitcoin struggled to sustain gains last week after surging past $100,000 following President Trump's election.
At 1156 GMT, bitcoin traded at $98,852.17, down approximately 6% daily, and hitting its lowest level since January 16th.
Technology stocks plummeted as investors feared Chinese AI startup DeepSeek could challenge Western dominance in the sector. Some refer to this as AI's "Sputnik moment," alluding to the Soviet satellite launch that ignited the space race in the 1950s.
"Bitcoin's losses appear to be driven by risk-averse sentiments circulating markets due to DeepSeek," explains eToro analyst Simon Peters.
Geoffrey Kendrick, head of digital asset research at Standard Chartered, attributes the decline to falling Nasdaq futures. However, he also highlights the lack of focus on crypto in Trump's initial announcements as a contributing factor.
Trump's executive order established a working group for crypto regulation and explored a crypto stockpile, while the SEC withdrew accounting guidance that had impeded crypto adoption.
Additionally, the prospect of sustained higher interest rates also dampened investors' appetite for riskier assets, notes Thomas Puech of digital asset hedge fund Indigo. The Federal Reserve policy meeting this week is expected to maintain interest rate stability.