Deepseek causes market turmoil.

The crypto markets took a significant hit. What exactly happened?

Last week, a new AI model called Deepseek, originating from China, was introduced. Deepseek is a direct competitor to the well-known ChatGPT. But what caused the disruption? Investors in American tech companies are concerned. Deepseek was developed in an impressively short time with surprisingly little funding, whereas ChatGPT required years of development and billions of dollars in investment. This raises questions about the valuations of American tech companies.

This uncertainty sparked turmoil in the stock market. And because crypto remains closely correlated with equities, the crypto markets also experienced a sharp correction. So, what does this mean for your crypto portfolio? While this is an interesting and relevant development, we see it primarily as a distraction from the bigger picture. Looking ahead to 2025, we see plenty of positive signals on the horizon.

For example, the crypto task force in the U.S. has been established to create a clear regulatory framework. Additionally, there is a pro-crypto president in office who aims to drive growth in the industry. And with interest rate cuts expected, traditionally a positive development for growth markets like crypto, the outlook becomes even brighter. In short: the current volatility is frustrating, but we see 2025 as a year full of opportunities.