It is easy to imagine, and indeed, based on social media reactions, it almost feels as though most cryptocurrency enthusiasts viewed Donald Trump significantly more negatively after the first seven days of his presidency than they did before his inauguration. What was initially seen as a potential golden age for the crypto world has quickly turned into a period of disillusionment, with the market reacting to unexpected developments that have shaken the foundations of the cryptosphere.
Trump’s second ascension to the White House was met with considerable enthusiasm by cryptocurrency owners, speculators, and the crypto industry at large. This enthusiasm was shared even by those who otherwise found little to admire in Trump’s policies or character. The optimism was partly rooted in wishful thinking, partly in the belief that Trump would inevitably be an improvement over his crypto-hostile predecessor, and partly in the alignment of the 2024 election with the four-year market cycle. Historically, the first year of a new administration has often coincided with a bull run in the crypto market, and many hoped this pattern would hold. Additionally, the political alliance between Trump’s campaign and the so-called “Crypto Bros” during the election was expected to continue, delivering tangible benefits to the crypto industry and its users.
However, the reality of Trump’s inauguration fell far short of these expectations, failing even to meet the pessimistic “sell the news” forecasts. Disappointment began to set in even before the inauguration, with the launch of Trump-related meme coins. These coins, before their inevitable collapse, managed to drain liquidity from Bitcoin and other, ostensibly more serious cryptocurrencies. This phenomenon highlighted the speculative and often irrational nature of the crypto market, undermining confidence in its stability and long-term potential.
Seven days into Trump’s presidency, the cryptosphere is now grappling with what can only be described as an ultimate Black Swan event: the emergence of DeepSeek, a Chinese AI chatbot that appears to be faster, more efficient, and more accessible than its US-developed counterparts. This development has sent shockwaves through the market, triggering a massive selloff. AI-related stocks have been hit particularly hard, and Bitcoin and other cryptocurrencies have followed suit. The market’s reaction is partly due to the uncertainty surrounding DeepSeek’s long-term implications for the economy and technology. In a market still dominated by greed and short attention spans, the AI-related carnage is likely to have a negative impact on the crypto world, at least in the short term.
For the crypto community, DeepSeek represents both a challenge and an opportunity. On one hand, the rise of AI could disrupt the market in ways that are difficult to predict, much like past buzzwords such as “ICO,” “DeFi,” “NFT,” or even the “dot com” boom of the pre-crypto era. These trends created wealth for some but ultimately led to significant losses for many. On the other hand, if DeepSeek and similar chatbots live up to their promise, they could revolutionise the way we work, making tasks simpler and more efficient. This, in turn, could facilitate wealth creation through more traditional and meaningful means, rather than speculative investments in meme coins or other fleeting trends.
This moment also presents an opportunity for the crypto world to return to its roots. The industry has become overly reliant on messianic figures—whether they are Trump, Elon Musk, Vitalik Buterin, or Sam Bankman-Fried—to drive its narrative and market movements. This reliance is particularly problematic when these figures are associated with the power of the state or the establishment, as it undermines the decentralised ethos that originally defined the crypto movement. The rise of DeepSeek and the challenges it poses could serve as a wake-up call, prompting the crypto community to refocus on its core principles of decentralisation, innovation, and financial sovereignty.
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