Why US Stock Market is Crashing?

Today marks the day of intense volatility, with all major and minor stocks experiencing significant drops, resulting in the US Stock market crash. Although many industry analysts and giants have predicted this, the impact is far bigger than most expectations, wiping out billions within a few hours. However, no macroeconomic or political event is driving this drop. Instead, a newly launched China’s AI bot, DeepSeek, has crashed the global market, which includes crypto. Let’s discuss.

Why US Stock Market is Crashing?

The biggest reason behind the US Stock market crash is a Chinese AI startup, DeepSeek, which has shaken the entire Artificial Intelligence and financial markets. Until now, the biggest contributors to the AI industry were OpenAI, Apple, Microsoft, and other US giants. However, the introduction and success of Chinese AI has created a wave. Its low budget, high functionality, and other features made US investors question the ever-growing AI bubble, leading to a sell-off.

DeepSeek is a free, open-source AI model built in just two months and under a budget of just $6M. This is lower than the bigger contributors like ChatGPT, which spends nearly $6B annually, whereas the others, like Google, have a $51B expenditure in 2025 and much more. This difference shocked the netizens, triggering a mass sell-off in the stock market, further developing into a crash. This began with the NASDAQ 100 dropping by 236 points in a single trading day, followed by other stocks.

List of Major Stocks and Their Price Crashes

According to StockTwits, the Stock market crash is on track to erase a trillion dollars from the market, ruining the performance of all the major companies. This includes the popular crypto stock tank, like NVDA, whose stock valuation is $142,62 after a 3% decline, popular Bitcoin supporter Microstrategy (MSTR) stock price is $343.67 after a 5% drop, and much more.

Note: The stock values have recovered significantly from their low points.

The impact of this stock market crash is also visible in the crypto market, where the tokens have faced significant declines, losing 7% of the global market cap in just a day.

Crypto Market Crashes, A Ripple Effect

The cryptocurrency market often mirrors other financial and traditional markets, especially during periods of high volatility. This is due to the building of fear among investors and macroeconomic narratives. Today, the crypto market drop wiped out 7% of its market cap. The biggest impact was on the Bitcoin price, which dropped by 5% to $98.9k. The value of many other altcoins plummeted to 8-10%.

According to an earlier CoinGape report, the most concerning cryptocurrency price drops are in Ethereum, XRP, Solana, and others. These drops have put investors’ portfolios at significant risk, but the increased trading volume indicates that users are taking this crypto market crash as a buying opportunity.

What You Should Do Next?

Such market corrections often occur in the financial market, where investors’ sentiments play the biggest role. In such situations, experts insist that crypto investors maintain calm and keep holding their assets until the market recovers instead of panicking. Considering the high trading volume in the crypto market, this indicates that investors are buying digital assets during a crash to benefit from upcoming recoveries.

Additionally, the DeepSeek AI model success reveals the development of the industry, which could assist in better services and products in less span and less budget. Once the sentiments settle, the US stock market and the adjacent markets may witness recovery.

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