Crypto Market Update: Bitcoin Recovers as DeepSeek Concerns Ease and AI Tokens Rebound

The cryptocurrency market is exhibiting signs of recovery, with bitcoin rising to $102,000 and futures linked to the Nasdaq showing positive trends. Among major cryptocurrencies, XRP leads the way with an 11% increase, followed by SOL with a 7% gain. AI-related coins, which suffered significant losses on Monday, are now posting gains of up to 4%. The rebound is likely driven by skepticism surrounding Chinese tech startup DeepSeek's claims of developing a ChatGPT competitor for just $6 million, with critics arguing that this figure does not account for the costs associated with prior research and development. Furthermore, the concept rooted in the Jevons Paradox suggests that efficiency advancements often lead to increased usage, resulting in net positive growth for the industry. This development is beneficial for bitcoin and the broader cryptocurrency market, as it aligns with the narrative of U.S. exceptionalism, particularly given President Trump's supportive stance on crypto and plans for a strategic digital asset reserve. In related news, Arizona lawmakers have advanced a bill allowing government entities to invest up to 10% of their capital in bitcoin and other digital assets. The overall outlook remains bullish, with on-chain data indicating the capitulation of weak investors and continued accumulation by large players. According to CryptoQuant data, the proportion of investors with a balance of at least 1,000 BTC who purchased coins in the last 155 days has increased from 43% to 60%, reflecting the emergence of large players amid optimistic sentiment. QCP Capital expects this week to test BTC's correlation with equities, particularly as a favorable regulatory environment offers potential support.