Bitcoin dived below $100,000 on Monday morning, slumping lower in synch with major European stocks and US big tech pre-market prices.
The cryptocurrency plunged to a low of $97,200 in early trading in Europe, before evening out at around $99K in late morning, around 6.30am Eastern US time.
Meanwhile, European and US semiconductor names fell sharply to extend losses from Friday, with ASML and ASM down 10%, Nvidia, Broadcom and Super Micro Computer tumbling around 12-14% in pre-market trading, with drops of around 6% for Microsoft and Advanced Micro Devices.
Analysts pointed to Chinese DeepSeek as the catalyst for the global technology sector sell-off after the startup unveiled an artificial intelligence bot said to be cheaper and less data-hungry than those of its western rivals.
DeepSeek’s free AI large language model was unveiled last week, matching OpenAI models but at a tenth of the cost, requiring a fraction of the data and in an open-source format that means anyone can help develop it.
Kathleen Brooks at XTB said "this is causing an existential crisis" for the US stock market.
"Deepseek is a clear reminder that US AI dominance cannot be taken for granted, as China plays catch up and Chinese tech stocks have surged on Monday.
She says Deepseek is "causing excitement in financial markets" for its free, open source model, and "shows that China can produce AI tech that is cheap to use for the consumer, which is leading to questions about the high level of capex that US tech firms are spending on their AI capabilities".
For bitcoin, having planted a flag north of $109K in the wake of Donald Trump's return as US president, the digital coin saw its recent gains erased "amid broader risk-off sentiment and lingering uncertainty over Trump’s vague crypto policies", said analysts at Saxo.
Altcoins were even bigger fallers, with ethereum, XRP and solana all down between 7% and 11%.
Trump’s memecoin plunged another 11%, extending its post-launch decline to 60%.