Could DeepSeek Sink Bitcoin?

Why did a Chinese AI startup torpedo BTC prices?

In this week’s edition of The Context, we talk China, Trump, and Pump.fun.

[Order up]

Right after we went to print last Thursday, President Trump signed an executive order filled with crypto mandates.

What Media Said ????:

• Catherine McGrath (Fortune) listed the three major elements in the order: a directive for “the government to develop a clear regulatory framework for the industry and explore the creation of a national digital asset stockpile” as well as the creation of a working group led by AI and crypto czar David Sacks and filled out by the SEC and CFTC chairs, among others.
• “Such orders are more of a beginning than an end in federal policy, but the pro-crypto president has taken that first step,” explained Jesse Hamilton & Nikhilesh De (CoinDesk).
• Still, traders got exited. CoinShares reported Monday that “the executive order was likely one of the catalysts for a fresh injection of $1.9 billion into various crypto [exchange-traded products],” relayed Helen Partz (Cointelegraph).

PR Perspective ??:

Now that the executive branch seems firmly onboard with a pro-crypto policy, expect more nuance to come out of the industry. “Pro-crypto” may become something of an irrelevant descriptor as various parties lobby for specific regulations, protections, and policies—some of which may be in conflict.

[DeepSeek and ye shall find]

Chinese tech startup DeepSeek came out of nowhere to release an open-source AI model, R1, that Marc Andreessen called “AI’s Sputnik moment.”

What Media Said ????:

• R1’s release called the U.S.’s AI “dominance into question,” wrote Blake Montgomery (The Guardian). Its development costs were roughly 1/20th that of ChatGPT’s, and it uses 1/10th of the GPUs. Demand for chips—and data centers—may not be as high as investors thought. So: Stock prices for chip-maker Nvidia and the entire tech sector dropped.
• Crypto dropped, too, dipping briefly below $100,000. In trading terms, Bitcoin has a “tight correlation with US tech stocks,” wrote Suvashree Ghosh (Bloomberg). Doubts about Big Tech dominance “can dent wider speculative ardor”—despite Trump’s executive order.
• One analyst called the crypto dip a “knee-jerk reaction,” wrote Krisztian Sandor (CoinDesk). Another said it’s likely that markets got over-excited about the executive order. Now that prices have dipped a bit, BTC can go back to rising over the long term.

PR Perspective ??:

That crypto is being lumped in with Big Tech means that the upstart is becoming part of the institution. And the DeepSeek drop means that those working in the tech industry shouldn’t get too comfortable with today’s paradigm; things can change quickly.

[Funhouse money]

Memecoin trading platform Pump.fun earned $15.5M in fees Friday, its most profitable day ever.

What Media Said ????:

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The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).

The team: Founder Samantha Yap and consulting editor Jeff Benson, Andrew Wickerson, Emma Murphy, Nathalie Larrea, Trisha Goswami and Shajar Qureshi. Your feedback is, as always, welcome. Ping us at [email protected]. Old newsletters can be found here.

This newsletter is prepared by YAP Global, an international PR Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and brands through impactful storytelling. Find out more about us here.