Bitcoin falls as AI industry turmoil drives gains, analysts say initial market reaction may be overdone

Odaily Planet Daily News DeepSeek's success shows that the competition from China in artificial intelligence is becoming increasingly fierce, which has exacerbated concerns about whether the high valuations of US technology stocks can be sustained. The risk for the cryptocurrency industry is that this anxiety may weaken the broader speculative enthusiasm and weaken the boost from Trump's executive order supporting digital asset regulation. "While the cryptocurrency market remains closely related to the sentiment of the technology industry, periods of increased volatility tend to be temporary, and the initial market reaction may be somewhat excessive," Rick Maeda, a research analyst at Presto Research, wrote in a report to clients. The 30-day correlation coefficient between Bitcoin and the Nasdaq 100 Index is about 0.67, according to data compiled by Bloomberg. A reading of 1 means that the assets move in sync, while a reading of -1 indicates an inverse correlation. Charlie Morris, chief investment officer of ByteTree Asset Management, believes that given that Bitcoin and large technology companies go hand in hand, "it is becoming increasingly difficult to distinguish between Bitcoin and large technology companies." He wrote in a report that despite the executive order and the decline in the US dollar index this year, "Bitcoin has not been able to set new highs." Parts of the digital asset market have fallen into a deep correction. An index tracking the top 100 digital assets has fallen more than 10% since the beginning of the year. (Bloomberg)