'DeepSeek Phobia' Spreading... Could It Affect Bitcoin?

'DeepSeek Blockade' Spreading Widely

Typically a Negative Factor for the Cryptocurrency Market During Trade Disputes

"The Key is U.S. Regulatory Movements"

Due to the 'DeepSeek Phobia' originating from China, major government departments in Korea have issued a 'DeepSeek ban'. There is speculation that if trade friction with China arises, it could negatively impact the cryptocurrency market, including Bitcoin.

According to related departments on the 6th, government departments such as the Ministry of Foreign Affairs, Ministry of National Defense, Ministry of Unification, and Ministry of Trade, Industry and Energy have blocked access to China's AI DeepSeek, and the Ministry of Economy and Finance is considering a blockade. Financial sectors like Hana Bank, Woori Bank, and KB Kookmin Bank have also joined the ranks of blocking DeepSeek.

The widespread expansion of the DeepSeek ban is due to the possibility of information leakage. DeepSeek collects various personal information, including the user's name, date of birth, keyboard input patterns, and rhythms, storing them on servers in China, raising security concerns.

Cryptocurrency Investment Sentiment Weakens During Trade Friction

Last week, the cryptocurrency market experienced a sharp decline due to the DeepSeek shock. As DeepSeek emerged as a 'low-cost, high-performance' AI model, U.S. tech stocks like NVIDIA plummeted, and the cryptocurrency market, which has a high coupling with the U.S. stock market, was directly hit.

However, Minseung Kim, head of Korbit Research Center, explained, "The U.S. stock market's plunge last week was a complex phenomenon caused by the Federal Reserve holding rates steady and Japan doubling its rates, with the emergence of DeepSeek," adding, "It's difficult to find a direct connection between DeepSeek and Bitcoin, so the (plunge) cannot be attributed solely to DeepSeek."

The issue arises if the government's DeepSeek access blockade leads to trade disputes. China has been sensitive to foreign companies blocking its technology. A representative case is when China retaliated by blacklisting some U.S. companies and restricting product distribution during the U.S. sanctions on Huawei in 2019.

The prevailing analysis is that if trade friction arises, cryptocurrency investment sentiment will inevitably weaken. Jaekyung Park, a professor at Politec University (head of the Virtual Asset Value Assessment Institute), said, "There is a sufficient possibility that China will impose economic retaliation on countries that ban its technology," adding, "If uncertainty increases due to trade disputes, the risk-averse sentiment will inevitably grow."

Attention on 'AI Agent' Impact

There is also an opinion that the spread of the DeepSeek ban should be closely watched. Not only Korea but also Japan, Taiwan, Australia, Italy, and others have started regulating DeepSeek, and the European Union is also reportedly monitoring the situation. Subin Ahn, data lead at Hashd, analyzed, "The key will likely be the U.S. movements," adding, "If the U.S. strengthens regulations on Chinese AI, supported by major countries' (DeepSeek) bans, the cryptocurrency market is likely to react sensitively."

There is also a forecast that open-source-based DeepSeek could positively impact AI agent-based cryptocurrencies. Ahn said, "AI in the cryptocurrency field is mostly open-source-based," adding, "DeepSeek has provided an opportunity to change perceptions about open-source AI." Ahn added, "If the importance of open-source AI grows, it could help the AI agent industry in the long term."