The U.S. manufacturing sector is recovering, Bitcoin breaks $61,000, and the AI revolution leads tech stocks to soar.

Recently, the U.S. manufacturing sector has recovered for two consecutive months, raising concerns in the market about a resurgence of inflation. Meanwhile, significant breakthroughs in the field of artificial intelligence have sparked a new wave of discussions about the AI revolution. In the Crypto Assets market, the price of Bitcoin has surpassed the $61,000 mark, and the positive impact of the Spot ETF on the market is beginning to show results.

In early February, data released by the U.S. Labor Department showed that non-farm payrolls increased by 353,000 in January, marking the largest increase since January 2023 and far exceeding the expected 185,000. This employment data raised concerns about rising inflation. Subsequently released inflation data confirmed these concerns: January's CPI increased by 3.1% year-on-year and 0.3% month-on-month; core CPI increased by 3.9% year-on-year and 0.4% month-on-month, both higher than market expectations.

U.S. Treasury yields have been slowly rising since the end of January, reflecting market expectations for potential inflation. The market generally expects the Federal Reserve to make its first rate cut in June, and Goldman Sachs has also adjusted its expectations, believing there will only be four rate cuts this year, below the previously expected five.

The performance of the US economy is closely related to the manufacturing cycle. The latest released Markit Manufacturing PMI preliminary value is 51.5, which is higher than expected and the previous value, marking the first time since September 2022 that the US has been above the expansion line for two consecutive months. The number of manufacturing orders has reached a new high since June 2022, suggesting that the US may be entering a new round of inventory cycle, thereby driving employment and inflation.

Nevertheless, the market generally believes that the likelihood of the Federal Reserve continuing to raise interest rates is low. According to FedWatch data, although the probability of rate cuts has decreased, the probability of rate hikes remains at a low level. Currently, the economic development trend is accompanied by a certain degree of inflation, but it has not suppressed the rise of stocks and Crypto Assets, reflecting the market's optimistic attitude towards future rate cuts.

In the technology sector, the release of the video generation tool Sora has attracted widespread attention. The videos generated by it excel in picture quality, flow, and logical coherence, signaling that the content creation and media industry may face significant changes. The speed of AI technology development has far exceeded expectations, with just over a year passing from the emergence of ChatGPT to Sora.

Nvidia's latest financial report further confirms the rapid momentum of AI development. Revenue for the fourth quarter reached $22.1 billion, a year-on-year increase of 265%, and net profit grew by 769% year-on-year, both significantly exceeding market expectations. After the report was released, Nvidia's stock price surged over 16%, briefly becoming the third largest company by market value in the U.S. stock market.

It is worth noting that the younger generation of investors is increasingly favoring technology stocks and emerging assets. According to data from Charles Schwab, the number of custodial accounts for American teenagers is growing rapidly, with the most popular being technology stocks represented by the "Big 7". This trend suggests that, driven by AI technology, tech giants and Crypto Assets such as "new assets" may become mainstream investment varieties in the future.

In the crypto assets market, Bitcoin continued the tradition of the "Spring Festival行情", rising steadily from February 8, peaking above $61,000. This surge was mainly benefited from the reduction of selling pressure from Grayscale and the continuous inflow of funds into Bitcoin spot ETF. As of February 26, 11 ETFs had a cumulative net inflow of $6.15 billion, with the market value of held coins accounting for 3.81% of Bitcoin's total market value, surpassing the amount of Bitcoin held by a certain well-known exchange wallet address.

MicroStrategy also continues to buy Bitcoin in large quantities, purchasing 3,000 coins from February 15 to 25, bringing its total holdings to 193,000 coins, with an average holding cost of approximately $31,544.

One of the current focal points in the market is the approval progress of the Ethereum Spot ETF. Several institutions have submitted relevant application documents, with the most important date being May 23, which is the date when the U.S. Securities and Exchange Commission will make a final decision on a certain company's Ethereum ETF. If the Ethereum ETF is approved, it will bring more traditional investors and new capital into the Crypto Assets market.

The Bitcoin network is continuously optimizing to support more features, such as Layer 2 and inscription technology. To protect the value properties of Bitcoin, the industry has established the Bitcoin L2 standard to ensure Bitcoin's control and final settlement status in the expanded network.

Despite the rise in inflation, the market has still reached new highs under the strong impetus of the AI revolution. Currently, the market is not worried about further interest rate hikes, but is focused on the timing of the first rate cut. The impact of Grayscale's selling pressure is weakening, and the market is looking forward to whether Bitcoin can break through the historical high of $69,000.