Global market upheaval triggered by the success of Chinese AI startup DeepSeek has raised new concerns about the future of digital assets, following last year’s surge in crypto prices.

As of 1 p.m. Tuesday in Singapore, Bitcoin was trading at $103,000, recovering slightly from a 3% drop in the previous session, which occurred amid a significant plunge in the Nasdaq 100 Index. Other tokens, including Ether and Solana, also experienced deeper sell-offs.

The unexpected success of DeepSeek, signalling rising AI competition from China, has worsened concerns over the sustainability of high valuations in US tech stocks, which have largely relied on leading the innovation race. These fears could dampen investor enthusiasm, affecting the crypto market, despite President Donald Trump’s executive order favouring digital asset regulations.

Bitcoin’s close correlation with US tech stocks further highlights its vulnerability in this climate. Data from Bloomberg reveals a 30-day correlation coefficient of about 0.67 between Bitcoin and the Nasdaq 100, where 1 indicates assets moving in lockstep.

Charlie Morris, Chief Investment Officer at ByteTree Asset Management, remarked that it is “getting harder to distinguish between Bitcoin and big tech,” with both assets now moving in tandem. Despite Trump’s executive order and a retreat in the US dollar this year, Morris noted, “Bitcoin can’t make a new high.”

Bitcoin reached a record US$109,241 ahead of Trump’s inauguration in January but has since retreated. While Trump’s pro-crypto stance remains a powerful support for the market, his recent executive order failed to spark significant market reaction.

Jonathan Yark, Senior Quant Trader at Acheron Trading, stated, “If the Trump administration moves forward with an aggressive pro-crypto policy, Bitcoin and digital assets are in line for favourable repricing, even if traditional market demand wanes.”

Despite some optimism, parts of the digital asset market are already experiencing significant pullbacks. A gauge tracking the bottom half of the largest 100 digital assets has fallen more than 10% since the start of the year.

For Bitcoin, Caroline Mauron, co-founder of Orbit Markets, predicts that the range between $90,000 and $110,000 will likely “continue to hold for some time as the market consolidates.”