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From computing to blockchain to VR to AI, the tech sector is constantly powered by nascent technology, despite simultaneously being a seasoned industry. Furthermore, while various verticals of the tech sector compete to be the "next greatest thing," each pillar is seemingly co-dependent on the other. When one pillar falters, the entire industry suffers.
This week, we saw the emergence of DeepSeek upturn the entire AI market, which consequently sent shockwaves throughout the wider tech sector, with the crypto industry feeling its ripples.
Predictably, AI tokens were the first to be hit, alongside AI stocks. Node AI and Aeither are down more than 30% and 12% respectively over the month, following sharp declines this week.
Developed with just $6 million and minimal GPU resources (compared to ChatGPT's $157 billion valuation), DeepSeek vastly outperforms and undercuts the likes of leading AI giant, OpenAI. DeepSeek’s ability to run on mobile devices further underscores its efficiency.
DeepSeek is powered by the DeepSeek-V3 model, which its creators say "tops the leaderboard among open-source models and rivals the most advanced closed-source models globally."
Its impact has also been felt across the wider crypto market too, leaving all of the top 10 cryptocurrencies except for stablecoins in the red this week. Bitcoin is down just over 0.6% this week while Ethereum has fallen closer to 4%.
While it's easy to pitch blockchain and AI as rivals, it's clear that the two technologies can compliment each other, for better or worse.
But although developments in AI are beyond the control of the crypto industry, wins within its own industry must certainly be celebrated. This week saw Ripple obtaining two significant Money Transmitter Licenses (MTLs) in the US, granting the blockchain company permission to operate in New York and Texas.
The new licenses are part of Ripple's broader effort to expand its reach across the U.S., where it now holds more than 55 MTLs. The licenses from New York and Texas are viewed as strategic due to the strong demand for real-time global payments in these states.
Meanwhile, the revamped post-Gensler SEC has approved NYSE Arca's listing of Bitwise’s combined Bitcoin and Ethereum ETF. According to an SEC filing, the approval was granted on an "accelerated basis," as the proposal aligns with Section 6(b)(5) of the Exchange Act. The act requires exchanges to implement measures to prevent fraud and manipulation while protecting investors and serving the public interest.
Bitwise’s ETF will hold both Bitcoin and Ethereum alongside cash reserves, offering investors diversified exposure.
Risk appetites have intensified from last week's 75, "Greed," to 76, "Extreme Greed." The Fear & Greed Index uses 5-6 measurements to assess the current sentiment of the market and then rates that level of emotion on a scale of 1-100 – 1 is extreme fear and 100 is extreme greed.
But if these wins and losses are too much for you, fear not, as BRN has you covered. "While the market struggles to find a clear direction, Bitcoin remains backed by strong long-term catalysts, including increasing corporate and national adoption," BRN analyst Valentin Fournier states.
"Although short-term momentum is lacking, the upcoming PCE report could provide the catalyst digital assets need. We recommend maintaining a high exposure to digital assets, with a preference for Bitcoin over Ethereum."
As markets await the PCE report later today, the Fed acknowledged recent progress on inflation despite holding rates steady at the last meeting.
— BRN (Blockhead Research Network) (@thebrn_co) January 31, 2025
Top Stories (In No Particular Order)
AI Tokens Down Due to China's OpenAI Competitor, DeepSeek
As the general crypto market starts the week in the red, the AI sector is facing a particularly grey Monday morning. The AI token basket on CoinGecko fell 12%, while the CoinDesk 20 is down 5%.
Much of this market upset stems from DeepSeek, a new AI model introduced on Hugging Face. Developed with just $6 million and minimal GPU resources (compared to ChatGPT's $157 billion valuation), DeepSeek vastly outperforms and undercuts the likes of leading AI giant, OpenAI. DeepSeek’s ability to run on mobile devices further underscores its efficiency.
Blockhead
Ripple Achieves Licensing Milestones as XRP Faces Market Pressures
and market moves come against the backdrop of renewed scrutiny over XRP's decentralization.
The new licenses are part of Ripple's broader effort to expand its reach across the U.S., where it now holds more than 55 MTLs. The licenses from New York and Texas are viewed as strategic due to the strong demand for real-time global payments in these states.
Blockhead
Bitwise's Combined Bitcoin, Ethereum ETF Approved by SEC
The US Securities and Exchange Commission (SEC) has approved a filing from NYSE Arca to list and trade shares of a new exchange-traded fund (ETF) from Bitwise, which combines Bitcoin and Ethereum.
According to an SEC filing, the approval was granted on an "accelerated basis," as the proposal aligns with Section 6(b)(5) of the Exchange Act. The act requires exchanges to implement measures to prevent fraud and manipulation while protecting investors and serving the public interest.
Blockhead
OKX, Crypto.com, Bitpanda Secure Full MiCA Licenses
Crypto exchanges OKX, Crypto.com, and Bitpanda have received full Markets in Crypto Assets (MiCA) licenses.
Bitpanda received its license from the German Federal Financial Supervisory Authority (BaFin) while OKX and Crypto.com received theirs in Malta.
Blockhead
Trump Tariffs & Crypto Impact
On his first day in office, Donald Trump failed to declare the increased duties on foreign goods that he had promised to implement.
Global stock indices, cryptos, and important foreign currencies versus the dollar saw relief rallies as a result.
Over the next four years, Trump's policy choices will influence the worldwide economy and the direction of global markets, including cryptocurrencies.
Blockhead
Bitcoin Reserves: The Global Divide Over Crypto as a Strategic Asset
The conversation around Bitcoin as a sovereign reserve asset is accelerating, with governments, central banks, and lawmakers taking sharply different positions. While European regulators reject the idea outright, the United States is seeing a growing wave of legislative efforts to establish state Bitcoin reserves.
Meanwhile, Norway’s sovereign wealth fund is increasing its indirect Bitcoin exposure, and El Salvador is adjusting its Bitcoin adoption strategy in response to external pressures.
Blockhead
Grayscale Seeks XRP ETF Approval From SEC
An application to convert Grayscale's XRP Trust into an exchange-traded fund (ETF) has been submitted by NYSE Acra to the US Securities and Exchange Commission (SEC).
According to the 19b-4 filing submitted on Thursday, Coinbase Custody Trust will serve as the custodian for the fund and BNY Mellon Asset Servicing will act as the transfer agent.
Blockhead
Jupiter Announces Major Acquisitions, Token Buyback Program, Platform Overhaul at Catstanbul Conference
Solana-based decentralized exchange (DEX) Jupiter unveiled a series of announcements at its inaugural community conference, Catstanbul, held in Istanbul, Turkey, on January 25-26.
The DEX, founded in October 2021 and now one of the leading protocols on Solana, showcased its strategic direction with acquisitions, tokenomics initiatives, and platform upgrades designed to elevate its ecosystem.
Blockhead
Elon Musk's DOGE Explores Blockchain Technology
The Department of Government Efficiency (DOGE), led by Elon Musk, has reportedly held discussions about incorporating blockchain technology.
Musk, who now solely leads the department after Vivek Ramaswamy recently stepped down as a co-lead, has suggested using blockchain to reduce costs, streamline processes, and enhance transparency across government functions.
Blockhead
Events
Consensus (Hong Kong, 18-20 February)
Consensus is heading to Hong Kong, bringing together the industry’s most important voices from East and West for pivotal conversations and deal-making opportunities.
Consensus Hong Kong convenes global leaders in tech and finance to debate pressing issues, announce key developments and deals, and share their visions for the future.
Use promo code BLOCKDESK20 at checkout for a 20% discount on tickets here.
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