China’s DeepSeek AI Is Good for Bitcoin, Says Standard Chartered

The price of Bitcoin has declined by more than 1.6% today, with the market’s largest cryptocurrency struggling to regain momentum as investors fear tepid news from the Federal Reserve.

Opinion among analysts is mixed as to whether the Federal Open Markets Committee, or FOMC, will keep rates where they are today or lower them, as new President Donald Trump has called for.

While many analysts and financial firms expect rates to remain unchanged, some have suggested that today’s meeting could actually bring “a slightly dovish surprise” for Bitcoin, as 10X Research reasoned in its latest trading note.

This may help to blunt the impact that DeepSeek’s emergence has had this week on risk-on assets such as Bitcoin, although Standard Chartered’s Geoffrey Kendrick is expecting the cryptocurrency to recover from this shock regardless.

“DeepSeek has nothing to do with Bitcoin and in fact as DeepSeek means the price of AI is lower, it actually lowers inflation and is good for risk assets (like Bitcoin) which have no-AI presence,” he told Decrypt.

Kendrick expects Bitcoin to continue to rebound in the coming days, although the strength and timing of any return will depend on Jerome Powell and the rest of the FOMC.

“Risk assets will now wait for the Fed to pass tonight,” he adds. “If it is neutral I think BTC trades back above $105k, where it was pre-DeepSeek.”

Irrespective of the Fed’s decision, there’s a general consensus that the coming months will be kind to Bitcoin’s price, driven by growing institutional accumulation.

“While ‘risk off’ events like DeepSix can dampen near term price action, the longer term outlook for bitcoin is as bullish as ever, as individuals, corporates, TradFi, and governments around the world are all poised for accumulation,” said CryptoMondays founder Lou Kerner, while speaking to Decrypt.

This is a view shared by Kendrick, who notes that last week’s removal of accounting rule SAB 121 means that U.S. institutions are now more likely to enter the digital asset market.

“Total net inflows to the BTC ETFs are now $38 billion (in just over 12 months),” he says.

He also explains that only 1% of all Bitcoin ETF value was held by pension funds as of the end of September, implying considerable potential for growth.

“I expect that long-only sector (which is worth $40 trillion in assets) to properly enter BTC in 2025, meaning flows will be greater this year than [the] last,” he predicts.

And while there remains the threat that, at some point, the Trump administration may impose sweeping tariffs on trading partners, some figures are bullish that economic or geopolitical crises may actually strengthen Bitcoin long-term.

As Lou Kerner concludes, “BTC price action will continue to benefit from a world in crisis driving demand for a better store of value from everyone everywhere, and a dwindling supply.”

Edited by Stacy Elliott.