XRP, Bitcoin Are Falling. It Isn't Just China's AI Threat That Is Hurting Crypto. — Barrons.com
By Elsa OhlenBitcoin, XRP and other cryptocurrencies nosedived early Monday. Prices were mirroring a fall in U.S. stocks after a Chinese firm announced an open-source artificial intelligence model to rival ChatGPT, but cryptos were also hurt by expectations that the Federal Reserve will hold interest rates higher for longer.Bitcoin is down 5.5% over the last 24 hours to $98,864, according to CoinDesk data. The world's largest crypto hit $107,000 on Friday.The popular altcoin XRP is down 11% to $2.75.Futures tracking the tech-heavy Nasdaq were down 3% early Monday, hit by reports that Chinese company DeepSeek produced an open-source AI model that could rival that of OpenAI's leading ChatGPT, while being significantly cheaper to produce.Other major digital coins were also down. Ether is down 8.6% to $3,040 over the last 24 hours, according to CoinDesk, while Solana and Dogecoin plummeted 13% to $223 and $0.31, respectively.Macro factors may also impact cryptos today. The Fed's decision on whether to lower interest rates is coming up on Wednesday, and the central bank looks likely to hold rates steady for now.That has led some crypto analysts to attribute the fall in the price of digital assets to profit-taking ahead of the Federal Open Market Committee's meeting, as a slowdown in the loosening of monetary policy would typically lead to falling crypto prices.Even with Monday's drop, some coins such as XRP and Solana have seen massive gains so far this year. XRP is up over 30%, while Solana has climbed about 20%, fueled by optimism that President Donald Trump's second administration will boost crypto prices.Write to Elsa Ohlen at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.