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Arthur Hayes, CEO of the crypto trading platform BitMEX, recently raised concerns that DeepSeek AI might compel investors to reconsider their strategies, particularly when it comes to global investment options. In a January 27th post on X, Hayes noted that, until now, open-source artificial intelligence (AI) has been largely dominated by American tech giants, particularly OpenAI. However, with the rise of similar AI solutions from other parts of the world, Hayes believes investors may increasingly be drawn to alternatives outside of the U.S. influence.
A thot: what if the rise of Deepseek causes global investors to question US exceptionalism. What if they question y they are over weight US tech vs the world and why they are over weight US bonds vs the world?
— Arthur Hayes (@CryptoHayes) January 27, 2025
Hayes, who has an extensive background in traditional finance through roles as an equities trader at Deutsche Bank and Citi, argues that the shift toward decentralized financial options, such as cryptocurrencies, could be further accelerated by these developments in the AI sector. The growing prominence of DeepSeek AI, he suggests, could ultimately disrupt both the AI industry and traditional financial systems, encouraging a broader shift towards global diversification.
Founded in May 2023 by Liang Wenfeng, a hedge fund manager and AI expert, DeepSeek AI is shaking up the AI landscape by offering affordable, fast AI solutions. Backed by Wenfeng’s quantitative hedge fund, High-Flyer, DeepSeek is directly challenging the likes of OpenAI, Google, and Meta with its advanced capabilities. One of the most notable aspects of DeepSeek is its significantly lower price point compared to other AI services, such as ChatGPT. While ChatGPT recently introduced a $20 subscription, DeepSeek’s pricing is 20 to 30 times cheaper.
By January 2025, DeepSeek had already outperformed ChatGPT in the app store, marking a major milestone for the company. This rapid rise suggests that DeepSeek’s model resonates with consumers who are seeking AI solutions that are both affordable and efficient. The company’s success may signal a broader shift in how AI services are priced and accessed, making it more accessible to the average person. This, in turn, could encourage further innovation and drive the adoption of decentralized financial systems, such as cryptocurrency, as a way to escape the influence of centralized financial systems.
As AI solutions like DeepSeek disrupt traditional industries, Hayes also emphasized the increasing importance of cryptocurrencies as a hedge against geopolitical and economic risks. Unlike traditional financial markets, crypto operates without the constraints of a specific country’s borders or regulatory policies. This makes it a powerful tool for investors looking to diversify their portfolios without being subject to the control of a single nation.
In fact, 47% of traditional hedge funds have already integrated crypto assets into their portfolios, with many turning to derivatives to gain exposure to digital assets, according to a report by Financial News. Additionally, crypto’s global appeal is evident in the performance of South Korea’s cryptocurrency market, which outperformed the Korea Stock Exchange by 22% in December 2023.
With a growing number of individuals investing in cryptocurrencies, and studies showing that 65 million people currently hold crypto assets, the trend is clear: crypto is no longer a niche asset class. According to Security.org, an additional 14% of people without crypto holdings plan to invest in the future, signaling the increasing mainstream adoption of digital currencies.
Despite these positive developments in the AI and cryptocurrency sectors, market fluctuations persist. The total market capitalization of AI x crypto tokens is currently valued at $36.3 billion, but it has experienced a drop of over 12% in the last 24 hours, according to Coingecko. This volatility demonstrates that while AI and crypto are both gaining traction, they remain susceptible to market pressures.
For investors, Hayes’ predictions highlight the importance of considering the global options available to them, particularly in light of shifting market dynamics driven by innovations like DeepSeek AI. As AI technologies become more decentralized and cost-effective, and as cryptocurrencies continue to grow as a viable alternative to traditional financial systems, the landscape for global investment opportunities will continue to evolve. Whether investors will act on these shifts, however, remains to be seen, but Hayes suggests that the trend toward global diversification is already underway.
editor
A web 3 girl living in a web 2 world.
