Crypto mining stocks have taken a big hit as a new artificial intelligence (AI) model from China’s DeepSeek shakes up the market. The tech industry is facing a shift, with AI gaining dominance, leading to concerns about overvaluation. As a result, Bitcoin miners and other crypto-related stocks are struggling, adding pressure to an already volatile market.
Crypto Mining Stocks Plunge
For the second consecutive day, crypto mining stocks faced heavy losses. Major tech stocks began to recover, but crypto-related stocks were hit hard. The sell-off was mainly triggered by DeepSeek’s AI model, which quickly became the most downloaded app in Apple’s App Store.
Investors are now questioning the future of AI investments, affecting tech and crypto markets.
Some of the renowned crypto-mining companies saw their stock crash by almost 5% to 10% including Riot Platforms (RIOT), Cleanspark (CLSK) fell by 2.47%, Cipher Mining (CIFR) dropped, and even MARA Holdings (MARA).
In addition, Coinbase’s shares went down by 10%, and MicroStrategy, the largest corporate holder of Bitcoin, saw a decline of 8.5%.
But, Why Were Crypto Mining Stocks Hit the Hardest?
The arrival of DeepSeek has created uncertainty in the market. Since the company offers its services at much lower prices than competitors, analysts are now unsure if AI investments can last.
Bitcoin miners, who were already struggling after Bitcoin’s fourth halving in April, have been forced to diversify their operations. Many have expanded their operations beyond mining, venturing into AI and high-performance computing (HPC). CORZ, for instance, signed a 12-year deal with AI firm CoreWeave.
Experts believe it won’t be long before DeepSeek’s AI model is integrated into crypto AI projects.
AI Crypto Tokens Also Struggle
In addition to mining stocks, AI-related crypto tokens have also suffered significant losses. The total market capitalization for AI crypto tokens dropped 5.11% in the last 24 hours, bringing it to $42.33 billion.
Venice Token (VVV), a new project claiming private access to DeepSeek’s AI model, led the losses with a 20.29% plunge. Another platform, Virtuals Protocol (VIRTUALS), fell by 11.75%.
The ongoing market downturn highlights the increasing challenges faced by both AI and crypto sectors.
