Shares of crypto mining companies continued their downward trend for the second straight day, while major US tech stocks, including Nvidia (NASDAQ:NVDA), recovered sharply.
According to a Cointelegraph report, the decline in crypto mining stocks followed market upheaval caused by an artificial intelligence model released by China’s DeepSeek, which raised questions about the overvaluation of the AI sector in China.
Riot Platforms (NASDAQ:RIOT) saw its stock close down 4.37% on January 28, alongside rivals Cleanspark (NASDAQ:CLSK) and MARA Holdings (NASDAQ:MARA), which fell 2.47% and 0.14% respectively, according to Google (NASDAQ:GOOGL) Finance. This extended loss for crypto miners comes as the industry faces challenges with Bitcoin mining becoming more difficult and competitive, prompting some miners to allocate computing resources to AI model training.
In contrast, Nvidia, one of the "magnificent seven" top US tech stocks, experienced the largest rebound, closing the day up over 8.8% after a previous 17% drop on January 27. However, NVDA's stock price slightly retreated by 0.95% in after-hours trading.
The broader US market was severely impacted on January 27, with billions of dollars in value erased amid concerns that leading AI-driven tech stocks might be overvalued. This was triggered by DeepSeek's announcement of its new R-1 chatbot, which the company claims can compete with OpenAI's ChatGPT with just a $6 million development cost.
Other tech giants also saw gains on January 28, with Apple (NASDAQ:AAPL) rising 3.65%, Amazon (NASDAQ:AMZN) climbing 1.16%, Meta Platforms (NASDAQ:META) advancing 2.17%, Microsoft (NASDAQ:MSFT) increasing 2.87%, and Google parent Alphabet (NASDAQ:GOOG) growing 1.70%. The S&P 500 edged closer to a new all-time high, now just 1% away, as reported by The Kobessi Letter.
Amidst the tech stock recoveries, AI-related crypto tokens experienced further declines. The sector's market capitalization fell 5.11% in the past 24 hours to $42.33 billion, as per CoinMarketCap data. The Venice Token (VVV), associated with DeepSeek’s AI model, led the downturn among AI tokens, plummeting 20.29% over the past day. Virtuals Protocol (VIRTUALS) also saw a significant drop of 11.75% during the same timeframe.
Bitcoin (BTC), meanwhile, remains close to the significant $100,000 threshold. Market participants are closely watching the Federal Open Market Committee's upcoming decision on interest rates, with the CME FedWatch tool indicating a 99.5% probability that rates will stay within the current range of 4.25% to 4.50%.
