Crypto mining stocks decline as tech stocks stabilise

On January 28, crypto mining stocks experienced another round of declines, marking a second consecutive day of losses.

At the same time, major tech stocks showed signs of recovery after a market scare linked to DeepSeek’s announcement about its new artificial intelligence model.

DeepSeek claimed that its R-1 chatbot, developed for just $6 million, could rival the industry leader OpenAI’s ChatGPT.

This revelation stirred concerns about the potential overvaluation of AI-driven tech stocks, leading to substantial sell-offs.

Among crypto mining stocks, Riot Platforms saw a 4.37% drop, while Cleanspark and Marathon Digital Holdings also recorded losses of 2.47% and 0.14%, respectively.

In contrast, chipmaker Nvidia (NVDA) staged a significant recovery, rebounding over 8.8% after a 17% drop the previous day.

Other tech giants like Apple, Amazon, Meta Platforms, Microsoft, and Alphabet also saw gains, contributing to a notable rise in the SP 500.

The SP 500 recorded its third-largest single-day market capitalisation gain in history, closing 55 points higher and just 1% shy of an all-time high.

Despite the recovery in the tech sector, the crypto mining industry faces headwinds, with many miners shifting their computational power towards AI applications in response to increasing competition and mining difficulties.

The AI-related cryptocurrency sector also saw further losses, with its market capitalisation dropping by 5.11%, bringing it down to $42.33 billion.

Venice Token (CRYPTO:VVV), which claims to provide access to DeepSeek’s AI model, led the declines among AI tokens, plunging by 20.29%.

Bitcoin (CRYPTO:BTC) remains near the critical $100,000 mark, with speculation around upcoming Federal Reserve interest rate decisions weighing on the market

Analysts expect the Fed to keep interest rates at current levels, which could have significant implications for the crypto market.