Key Takeaways:

• Bitcoin price experienced a downtrend, dropping 6.5% to below $100,000 on Monday before stabilizing at $102,800. 
• The rapid success of China’s AI model DeepSeek contributed to uncertainty, disrupting cryptocurrency markets globally.
• DeepSeek’s global hype triggered a massive selloff, with $864 million liquidated in crypto within 24 hours.

On January 27, the price of Bitcoin fell to $98K, marking its first drop below $100K since President Donald Trump took office on January 20. The decline has been linked to the rapid rise of the Chinese AI app DeepSeek, which quickly surpassed ChatGPT to become the top-ranked app on Apple’s U.S. App Store. 

DeepSeek’s sudden popularity shook global markets, wiping out $1 trillion from the U.S. AI stock market and triggering $864 million in crypto liquidations.

Bitcoin Price Bounce Back: Would DeepSeek Trigger Another Decline? 

Bitcoin price managed to recover half of its losses, trading at approximately $102,800. Smaller cryptocurrencies faced even sharper declines, with XRP plummeting 14% and Solana dropping 11% before both partially rebounded.

⚠️BREAKING:

*BITCOIN SINKS BELOW $100K AMID GLOBAL SELLOFF$BTC pic.twitter.com/TruZ4B1TmB

— Investing.com (@Investingcom) January 27, 2025

The broader crypto market mirrored this volatility. 

Data from CoinGlass revealed that total liquidations across digital currencies reached $849 million on January 27. The combined market capitalization of all cryptocurrencies fell by 6.65%, landing at $3.37 trillion. 

This plunge reinforced the tight correlation between Bitcoin and tech stocks, a trend that has strengthened over the years, particularly with the rise of exchange-traded funds (ETFs) tied to digital assets.

However, much of the turbulence can be traced to DeepSeek, a Chinese AI chatbot app that has captured global attention, with its success triggering concerns about its impact on U.S. tech valuations. 

The app became a sensation after overtaking ChatGPT to secure the top spot on Apple’s App Store in the U.S., where it remains the most downloaded app. 

DeepSeek’s disruptive influence extends beyond its popularity. 

In December 2024, the app’s creators revealed in a research paper that the training of its DeepSeek-V3 model required less than $6 million in computing power, powered by Nvidia H800 chips. 

This cost-efficiency raised eyebrows among investors, as the app outperformed ChatGPT in several tests and fueled speculation about its potential to reshape the AI sector.

The panic over DeepSeek hit U.S. tech stocks hard. Chipmakers bore the brunt of the selloff, with Nvidia suffering a record-breaking 17% loss, wiping out $589 billion from its market value. 

This historic drop ended Nvidia’s reign as the world’s most valuable company, a title that was reclaimed by Apple, whose stock climbed 3% to reach a $3.45 trillion valuation.

Nvidia just lost $589 billion in market cap.

It's the biggest one-day loss in stock market history. pic.twitter.com/LNbkVJSfvh

— Brew Markets (@brewmarkets) January 27, 2025

Other major chipmakers, including Broadcom and Taiwan Semiconductor Manufacturing Company, also suffered steep declines, falling 17% and 13%, respectively. 

The selloff erased more than $1 trillion in market cap across the U.S. tech sector, raising questions about whether the current pace of investment in AI is sustainable. 

While Bitcoin price is on a partial recovery, it remains vulnerable to external shocks, as DeepSeek’s rise has demonstrated how quickly disruptive technologies can unsettle markets, leaving crypto and tech investors on edge. 

MicroStrategy Adds 10,100 BTC to Its Holdings Just Before Market Dips

MicroStrategy has once again reinforced its position as the largest corporate Bitcoin holder, purchasing an additional 10,100 BTC for $1.1 billion. 

The acquisition, completed at an average price of $105,596 per Bitcoin, was finalized just before a market correction triggered by the rise of China’s AI app, DeepSeek, sent Bitcoin’s price tumbling 6% below the $100,000 mark. 

MicroStrategy has acquired 10,107 BTC for ~$1.1 billion at ~$105,596 per bitcoin and has achieved BTC Yield of 2.90% YTD 2025. As of 1/26/2025, we hodl 471,107 $BTC acquired for ~$30.4 billion at ~$64,511 per bitcoin. $MSTR https://t.co/UM5dGUS9Ma

— Michael Saylor⚡️ (@saylor) January 27, 2025

This latest purchase follows MicroStrategy’s earlier acquisitions in January, when the company added 2,530 BTC on January 13 and another 11,000 BTC shortly after. 

These transactions brought the company’s total Bitcoin holdings to an impressive 471,100 BTC, acquired at an average cost of $63,610 per Bitcoin. Based on current prices, 

MicroStrategy’s Bitcoin holding is now valued at approximately $46 billion, solidifying its strategy of betting big on the digital asset despite market uncertainties. 

Michael Saylor, the firm’s CEO, remains unwavering in his commitment to Bitcoin, which aligns with his long-term prediction that Bitcoin could reach a staggering $13 million by 2045. 

However, as MicroStrategy doubles down on Bitcoin price just before DeepSeek triggered a market meltdown, the coming months will determine whether this latest purchase is a strategic victory or a high-stakes gamble.