What a week it was! U.S. President Donald Trump was particularly active on the topic of crypto late last week. While there was no specific crypto-related announcement during his inauguration on Monday, January 20th, his later actions are surely worth delving into. We will address these developments in our ‘Three in a Row’ segment later, but for now, let us focus on today’s sell-off, particularly in technology stocks, including GPU suppliers like Nvidia, and utility stocks tied to electricity providers.

The sell-off has been sparked by a new large language model (LLM) from the Chinese company DeepSeek. This model is said to require significantly less training and is far more efficient in its operations compared to current LLMs, such as those developed by OpenAI and Anthropic. The announcement has raised concerns that future LLMs could render current models obsolete in terms of input, leading to reduced demand for GPUs and electricity.

As a result, these sectors, particularly GPUs and electricity-related utilities, have seen heightened selling pressure. This has extended to a broader risk-off sentiment across high-risk assets, including crypto. However, it is worth noting that this development does not directly affect crypto. The reaction seems to be driven by short-term market sentiment rather than any fundamental impact on the crypto space. While the risk-off trend could persist for a few days, there is little to suggest a deeper issue for crypto markets. In our view, this story is more of a temporary disruption than a cause for significant concern.

Turning to President Trump, his actions last week regarding cryptocurrencies are far more consequential for the market than anything related to DeepSeek. Let us shift our attention to that—there is plenty to unpack!