I haven't followed the DeepSeek controversy but we can understand its negative impact on Nvidia stocks or indirectly on the US stock market considering that Nvidia has a high market cap but there is no direct link between it and Bitcoin mining.
DeepSeek has a direct impact on the AI industry, meaning that the demand for AI training could decrease significantly if DeepSeek methods are adopted. This would lead to a decline in revenue for Bitcoin mining farms, as they also utilize their infrastructure for AI training.
When revenue from AI decreases, these mining farms will have to return to balancing their finances in a context where the average cost to mine each BTC becomes more expensive. If the BTC price continues to stagnate while the AI trend cools down, smaller mining farms could incur losses and temporarily cease operations, impacting the overall network hash rate. Additionally, if BTC mining farms suffer losses, they may sell their accumulated BTC to fund operations, which could create fear and uncertainty among investors.