DeepSeek Overturns the AI ​​​​Card, What Opportunities Will the Crypto Market Usher In?

[TL；DR]:

DeepSeek is a low-cost, high-performance domestic AI model with a training cost of only $6 million, but its performance is close to that of OpenAI GPT-5, which costs tens of billions of dollars. It is called the “miracle of algorithm optimization” and has had a profound impact on the global financial market.

The release of DeepSeek triggered a significant decline in the U.S. stock market, especially a sharp drop in the share prices of technology giants such as Nvidia. The crypto market also suffered a sharp drop, with 7 million people suffering margin calls.

DeepSeek’s core competitiveness lies in its dynamic sparse training algorithm, which identifies key parameter paths in real time and allows 95% of neurons to sleep during non-essential stages, thereby increasing the model convergence speed by 3 times with the same computing power.

Introduction

The hottest recent tech event is the launch of the low-cost, high-performance DeepSeek artificial intelligence model, which coincided with the plunge in US tech stocks and the sharp fluctuations in the crypto market. Therefore, this article will discuss in detail DeepSeek’s major innovative measures and the many challenges and opportunities facing the crypto market.

DeepSeek Sparked an AI Revolution, and the Crypto Market Was Shaken Violently

Recently, a domestically produced AI model called DeepSeek has swept the global technology community with thunderous momentum. It only cost $6 million to train, but its performance is close to that of OpenAI GPT-5, which cost tens of billions of dollars. This achievement was quickly called a “miracle of algorithm optimization” by Silicon Valley - the reasoning speed of the DeepSeek-1 model is 40% faster than that of GPT-5, and the energy consumption is reduced by 70%, which directly shook the industry’s iron rule that “computing power is hegemony.”

Source: AI Advances

On the day the news was released, DeepSeek surpassed ChatGPT in the number of downloads on the Apple App Store and topped the list. US National Security Advisor John Bolton urgently stated that DeepSeek “threatens the US’s technological leadership” and launched a national security investigation. OpenAI CEO Sam Altman admitted on the Reddit forum: “We have made a historic mistake in our open source strategy, and DeepSeek’s lead may continue to shrink.”

The emergence of DeepSeek has naturally had a profound impact on the global financial market. In the short period after the release of DeepSeek’s high-performance report, the US stock market experienced a significant decline. The stock prices of technology giants such as Apple, Nvidia, Tesla, Microsoft, Amazon, Meta, and Alphabet (Google) have all fallen, with Nvidia’s stock price falling by nearly 17% at one point, and its market value evaporating by hundreds of billions of dollars. The market believes DeepSeek has shaken Nvidia’s dominant logic as a “computing power arms dealer.”

This chain reaction is not limited to the U.S. stock market. The crypto market has also fallen sharply after negative information such as the Trump administration’s new tariff policy and Salva’s cancellation of Bitcoin‘s legal currency status. 7 million people suffered margin calls. The Chicago Mercantile Exchange’s Bitcoin futures basis fell negative for the first time since August 2023, indicating that traders panicked and sold forward contracts.

Source: K33 RESEARCH

However, as of the date of writing, market sentiment has gradually stabilized, the decline in the crypto market has narrowed, and some mainstream cryptocurrencies have begun to stabilize and rebound.

DeepSeek’s Core Competitiveness at a Bargain Price

The core breakthrough of DeepSeek lies in the dynamic sparse training algorithm. When training traditional large models, all neurons are activated throughout the whole process, but DeepSeek can identify the key parameter paths in real-time and make 95% of neurons dormant in non-essential stages. This technology makes it possible to increase the model convergence speed by 3 times under the same computing power.

Source: OpenExO

More important is its open-source eco strategy. DeepSeek has made all the basic model codes public, and the Hong Kong University of Science and Technology team successfully reproduced the model performance within 48 hours using only 200 A100 graphics cards. Vertical variants such as the medical version of DeepMed and the financial version of DeepFin have quickly emerged in the open-source community, forming a fission-style innovation.

Source: @ylecun

Secondly, DeepSeek also performs well. According to official data, DeepSeek performs well in multiple benchmarks, especially in knowledge question answering, long text processing, code generation, and mathematical capabilities. Its performance is comparable to cutting-edge models such as OpenAI, and even better in some aspects. This performance advantage makes DeepSeek widely applicable and competitive in AI applications.

Source: DeepSeek-VL2

However, facing the strong impact of DeepSeek, the technology giants have significant strategic differences. According to the latest news, Microsoft has integrated DeepSeek into the Azure AI platform, and ARK Invest founder Cathie Wood asserted: “DeepSeek marks the transition of AI from capital-intensive to intelligence-intensive, and AI startups with a trillion-dollar market value will be born in the open source community.” However, Google insists on “large computing power + closed eco” and announced an additional $75 billion in capital expenditure to build AI data centers.

Corresponding to this is the latest policy trend in the United States. The U.S. Congress recently proposed to discuss the “2025 Act to Decouple American Artificial Intelligence Capabilities from China”. The bill prohibits Americans from assisting China in promoting AI and prohibits Americans from downloading or using DeepSeek, otherwise, it will be classified as a crime.

Challenges and Opportunities of AI+ Sector in Crypto Market

Undoubtedly, the technological iteration triggered by DeepSeek is cleaning up the crypto AI track. For example, a large number of AI Agent protocols developed based on the ChatGPT architecture were sold off by the market some time ago, and the market value of the Top 50 AI tokens shrank by 37% in a week.

In addition, the depreciation of computing power has led to intensified competition among projects such as Render Network and Aethir, which have launched zero-commission promotions, resulting in a sharp decline in the revenue of these computing power protocols.

Source: The Render Network

Of course, DeepSeek’s low cost and high performance will enable more crypto projects to adopt AI technology to optimize trading strategies, enhance risk management, and improve user experience. While eliminating those projects that cannot keep up with new trends in a timely manner, more efficient and innovative projects will undoubtedly be more competitive.

For example, by introducing the DeepSeek model, the Eliza platform has realized automated analysis and optimization of smart contracts. The DeepSeek model can analyze and adjust smart contracts in real-time according to market conditions and user needs, thereby improving the efficiency and accuracy of contract ution. At the same time, the DeepSeek model can also provide the Eliza platform with more accurate risk assessment and early warning services, helping the platform to promptly discover and respond to potential risk issues.

Source: eliza

In general, the strong launch of DeepSeek has reshaped the traditional AI narrative. When the cost issue is no longer so important, whether open source models such as DeepSeek can be quickly integrated and scenario-based innovation can be achieved will signify the new AI boom. We will continue to pay attention to more innovative protocols and products under the new narrative.