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The main reason for the sharp decline in cryptocurrency markets on the first day of the week was the launch of the new generation R1 model by China-based artificial intelligence initiative DeepSeek. This development negatively affected all markets and XRP also got its share.
Why is XRP falling? Deep Sack Panic
DeepSec’s R1 model opened up the possibility that a competitive model could be built with much less money spent on artificial intelligence studies. DeepSec said it developed its new model, which was particularly talked about over the weekend, in just two months, for less than $6 million. This amount caused a stir when it was significantly less than the costs of artificial intelligence models developed by Western companies. Shares of Nvidia, which benefited the most from the artificial intelligence frenzy due to its chip sales, fell sharply on the thought that there may be less demand for these chips. Shares fell more than 12 percent in pre-session trading. The decline spread to other chip companies and had a seismic impact on global stock markets.
The cryptocurrency market was also negatively affected by this situation. While Bitcoin fell below $98,000, leading cryptocurrencies also recorded steep declines. XRP was one of them. The third-largest cryptocurrency by market value retreated to $2.65, trading above $3.
On the other hand, XRP investors are eagerly awaiting the XRP Community Day event on Tuesday. Ripple’s CEO, Brad Garlinghouse, will speak at X Spaces that day at 18.00 Turkish time. Investors are focused on Garlinghouse’s statements about XRP.
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