Bitcoin Falls Below $100K as Tech Stocks Tumble
Bitcoin, the world’s largest cryptocurrency, experienced a sharp decline on Monday, dropping below $100,000 for the first time in 11 days. Analysts attribute this selloff to a broader market downturn, particularly in the tech sector, following concerns over China’s AI advancements.
At 11:56 GMT, Bitcoin was trading at $98,852.17, down about 6% for the day. This drop comes after a strong rally earlier this month, which saw Bitcoin surge past the $100,000 mark in response to U.S. President Donald Trump’s election victory. However, the momentum has now stalled, and market sentiment has turned cautious.
AI’s ‘Sputnik Moment’ and the Market Impact
One of the primary factors driving this selloff is the emergence of DeepSeek, a Chinese artificial intelligence startup that has disrupted the tech sector. Many investors see DeepSeek as a serious competitor to Western AI giants, triggering what some analysts are calling AI’s “Sputnik moment”—a reference to the Soviet Union’s launch of the first artificial satellite, which sparked the Cold War space race.
This sudden shift in investor sentiment led to a broader selloff in tech stocks, which in turn affected the crypto market. “Bitcoin’s losses are seemingly driven by the current risk-off sentiment due to DeepSeek’s rise,” said Simon Peters, an analyst at eToro.
Trump’s Crypto Stance and Market Disappointment
Another factor contributing to Bitcoin’s decline is the uncertainty surrounding U.S. crypto regulations under the new Trump administration. Many investors were expecting significant pro-crypto announcements from Trump’s first week in office. However, while an executive order was issued to explore new crypto regulations and a potential national crypto stockpile, the lack of immediate policy shifts left investors disappointed.
According to Geoffrey Kendrick, global head of digital asset research at Standard Chartered, this lack of strong crypto policy support, combined with a drop in Nasdaq futures, has put digital assets under selling pressure.
Interest Rates and Market Caution
In addition to the tech and crypto-specific concerns, macroeconomic factors are also playing a role in Bitcoin’s downturn. The U.S. Federal Reserve is set to meet this week, and analysts widely expect that interest rates will remain unchanged. This uncertainty over how long rates will stay elevated has created a more risk-averse market environment, leading investors to pull back from speculative assets like cryptocurrencies.
“Higher interest rates make riskier investments less attractive,” said Thomas Puech, CEO of digital asset hedge fund Indigo. “Until we see a clear shift in the Fed’s stance, Bitcoin and other cryptocurrencies may continue to experience volatility.”
What’s Next for Bitcoin?
Despite this recent dip, many crypto analysts remain optimistic about Bitcoin’s long-term trajectory. With institutional adoption on the rise and regulatory clarity expected to improve under the new administration, some investors see this pullback as a temporary correction rather than the start of a prolonged downtrend.
As the markets continue to react to AI disruptions, U.S. crypto policies, and interest rate decisions, Bitcoin’s price movements in the coming weeks will be closely watched by both retail and institutional investors.
