{"id":20848,"date":"2025-02-02T18:52:20","date_gmt":"2025-02-02T16:52:20","guid":{"rendered":"https:\/\/forklog.com\/en\/week-in-review-deepseek-shock-fed-hold-and-us-tariffs\/"},"modified":"2025-02-02T18:52:20","modified_gmt":"2025-02-02T16:52:20","slug":"week-in-review-deepseek-shock-fed-hold-and-us-tariffs","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/week-in-review-deepseek-shock-fed-hold-and-us-tariffs\/","title":{"rendered":"Week in review: DeepSeek shock, Fed hold and US tariffs"},"content":{"rendered":"

China\u2019s DeepSeek startled markets, the Fed<\/span> kept its key rate unchanged, US tariffs triggered a bitcoin correction, mining difficulty eased, and other highlights from the week.<\/p>\n

Rates and \u2018trade wars\u2019<\/strong><\/h2>\n

It was a choppy, highly volatile week in crypto. Monday opened with a pullback: bitcoin plunged<\/a> from $105,000 to $99,700, dragging other digital assets with it.<\/p>\n

Analysts linked the decline to profit-taking amid President Donald Trump\u2019s regulatory initiative<\/a> to create a cryptocurrency task force.<\/p>\n

\"BTCUSDT_2025-02-02_18-37-10\"
Hourly chart of BTC\/USDT on Binance. Data: TradingView<\/a>.<\/figcaption><\/figure>\n

The first half of the week saw the asset recoup losses, briefly topping $105,000 on 30 January after the Fed meeting.<\/p>\n

The regulator kept<\/a> the target range for the policy rate at 4.25\u20134.5% per annum, in line with expectations. Chair Jerome Powell noted the possibility of US banks engaging with cryptocurrencies provided risks are properly managed.<\/p>\n

However, the Fed considers inflation still far from the 2% target.<\/p>\n

The post-meeting bounce proved short-lived: on Friday bitcoin began another swift slide. The market was further unsettled by Trump\u2019s decision to impose tariffs on goods from Canada, Mexico and China.<\/p>\n

\"Today-I-have-implemented-a-25-Tariff-on-Imports\"
Data: TruthSocial.<\/figcaption><\/figure>\n

Equities had yet to react to the \u201ctrade wars\u201d, but on Sunday digital gold slipped below $100,000. Daily liquidations in crypto exceeded $500m.<\/p>\n

Other top-ten assets by market capitalisation were also in the red. Ethereum fell below $3,100, losing 7% on the week.<\/p>\n

\"Snimok-ekrana-2025-02-02-v-16.49.21\"
Data: CoinGecko.<\/figcaption><\/figure>\n

Solana shed 17.5%, Dogecoin 15.9% and XRP 10.3%.<\/p>\n

Total crypto market capitalisation stands at $3.53trn (-5.6%).<\/p>\n

Bitcoin\u2019s dominance is 56.5%; Ethereum\u2019s is 10.7%.<\/p>\n

Chinese AI rattles markets<\/strong><\/h2>\n

On 20 January the Chinese AI start-up DeepSeek released an open-source reasoning model, DeepSeek-R1. Over the past weekend the model drew strong attention, prompting sell-offs in equities and crypto at the start of the week.<\/p>\n

The chatbot quickly climbed the US App Store\u2019s free-app rankings, overtaking even ChatGPT.<\/p>\n

The main reason for the frenzy is cost. Only $5.6m was spent on developing DeepSeek, compared with hundreds of millions for American rivals. The product also needs far fewer graphics processors and can run on gaming GPU<\/span>.<\/p>\n

In several tests the Chinese model outperformed the latest Llama 3.1, GPT-4o and Claude Sonnet 3.5. Independent specialists assessed accuracy, problem-solving, mathematics and programming.<\/p>\n

DeepSeek also surprised observers by apparently bypassing US export restrictions. Even Telegram founder Pavel Durov drew attention<\/a> to the app.<\/p>\n

The chatbot\u2019s success triggered a sell-off in the tech sector, including Nvidia. The chipmaker\u2019s shares fell<\/a> 15% over the trading week.<\/p>\n

\"Snimok-ekrana-2025-02-02-v-18.39.02\"
Data: Yahoo Finance.<\/figcaption><\/figure>\n

Crypto also corrected, particularly AI-linked tokens \u2014 down 21%<\/a> over seven days.<\/p>\n

Despite the blow, DeepSeek spurred companies to accelerate. On 28 January Alibaba unveiled<\/a> a \u201cDeepSeek killer\u201d, and OpenAI added the o3-mini model to ChatGPT.<\/p>\n