On January 27th, investors took notice of China’s latest AI firm, “Deepseek,” a direct competitor to OpenAI’s ChatGPT. What raised eyebrows was the firm’s claim that it developed its chatbot with just $6 million—a fraction of the billions spent by OpenAI. This revelation sparked concerns about the global leadership of incumbent U.S. tech giants in AI, triggering a global sell-off in the technology sector as fears of overinflated valuations mounted. These concerns also spilled over into the digital assets market, leading to a broader correction, with AI-related projects being hit particularly hard.
On January 23rd, Kansas Senator Craig Bowser introduced a bill proposing that up to 10% of the public employees' retirement fund be allocated to Bitcoin ETFs. Notably, the bill stipulates that the fund would not be required to sell its holdings if the allocation exceeds 10%, unless it is deemed to be in the best interest of the beneficiaries.While this is an exciting development, the bill must still undergo a thorough review and multiple legislative steps before it can be approved. Additionally, similar proposals have been introduced by senators in states like Pennsylvania and New Hampshire. However, it remains to be seen whether these efforts will lead to actionable legislation or if they are merely attempts to gain favor with investors.
On January 23rd, Senator Cynthia Lummis of Wyoming was announced as Chair of the Senate’s Subcommittee on Digital Assets, signaling a significant step forward for crypto legislation. Known as a staunch advocate for digital assets, Lummis previously introduced a bill to establish a national Bitcoin Strategic Reserve. She will be joined by other pro-digital assets supporters, including newly elected Senator Bernie Moreno, an Ohio blockchain entrepreneur who defeated former Democratic Chairman Sherrod Brown. A digital assets-focused super Political Action Committee, an organization that pools campaign contributions from members and donates those funds to campaigns for or against candidates, reportedly invested $40 million in support of Moreno’s campaign.
This subcommittee is expected to spearhead digital assets-related legislation in Congress. While the House made substantial progress on digital assets measures last year, the Senate Banking Committee—formerly led by Brown—resisted advancing the bills. Under Lummis’ leadership, the subcommittee may now bridge that gap and drive critical developments in the regulatory framework for digital assets.
On January 23rd, U.S. President Donald Trump signed an executive order establishing a new Digital Assets Working Group. This group is tasked with proposing updated digital asset regulations and exploring the creation of a national digital assets stockpile. Notably, the order also banned the development of a central bank digital currency (CBDC) in the United States.
The market responded positively to the announcement, aligning with Trump’s promise to reform U.S. policy on digital assets swiftly. However, the proposal for a national digital assets stockpile sparked mixed reactions. Some investors expressed concerns that such a move could undermine Bitcoin’s role as a decentralized store of value.
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