Bitcoin Slips Below $100,000 as Chinese AI Model Rattles Markets

(Bloomberg) -- Bitcoin and other cryptocurrencies tumbled as the emergence of a new Chinese artificial intelligence model triggered a global selloff in riskier assets.

The original cryptoasset fell as much as 6.5% on Monday morning in London, the biggest intraday drop since Dec. 6. Smaller tokens suffered even deeper losses, with XRP sliding 9% and Solana down by a similar magnitude. The crypto declines mirrored weakness across most stock markets, with US technology futures down sharply.

Crypto traders have so far shrugged off Donald Trump’s executive order to support the industry last week, shortly after he returned to the White House, with some arguing that prices already reflected the move. Concerns that Chinese startup DeepSeek’s AI model will hit tech valuations added to the risk-off mood in crypto on Monday.

“The Chinese LLM poses a potential threat to US equity markets by disrupting US AI dominance with their cost efficiency and groundbreaking open-source technology,” QCP Asia said in a report on Monday, referring to so-called large language models. “Now the question is how will Trump retaliate?”

The slump comes after the President on Friday ordered the creation of a working group to advise the White House on crypto policy in a long-awaited executive action. The group is tasked with proposing a regulatory framework for digital assets in the US within six months, while evaluating the creation of a crypto stockpile. The order stopped short of confirming that the US would establish a Bitcoin reserve — something Trump had vowed to do on the campaign trail.

“Even though the market got 90% of what it wanted with the executive orders, it evidently was mostly priced in,” said Sean McNulty, head of APAC derivatives at FalconX. Anything short of a Bitcoin reserve “that immediately started buying BTC was going to disappoint,” he added.

The digital-asset market took the order largely in its stride on Jan. 24, posting modest gains in its aftermath. Bitcoin is up more than 50% since Trump’s election victory in early November. Trump used to be a crypto skeptic but had a change of heart on during campaigning, in part as the industry ramped up its involvement in the election through sizable political donations. He has pledged to make the US the world’s crypto capital and in December named venture capitalist David Sacks as artificial intelligence and crypto czar.