US crypto market demand drives $1 billion inflows into crypto funds

• Crypto-focused funds recorded over $1.33 billion of inflows so far this week, suggesting renewed institutional demand.
• Coinbase premium index rises above zero, indicating rising US retail demand. 
• US President Donald Trump reinforced the stand to be dominant in crypto on Wednesday. 

The cryptocurrency market shows early signs of recovery after weeks of consolidation, as demand for spot crypto-focused Exchange Traded Funds (ETFs) in the US market rises despite the ongoing war with Iran. Data show a significant increase in institutional and retail demand for crypto in the US, signaling a renewed risk-on sentiment. US President Donald Trump further pressed on Wednesday the need to be dominant in the crypto market.

ETFs inflows support crypto market recovery 

The US Stock market closed in the green on Wednesday, and Bitcoin (BTC) holds above $72,000 at press time on Thursday, signaling optimism for US equities and crypto despite the US-Iran war.  

An increase in institutional demand is supporting the crypto market's recovery. CoinGlass data shows that US spot crypto-focused ETFs recorded $654.59 million in inflows on Wednesday, marking their third consecutive day of positive flows totaling over $1.33 billion so far this week. This capital inflow builds on the $921.96 million of inflow last week, signaling intense demand for crypto among US institutions. 

Similarly, the US retail demand for crypto is increasing, supporting Bitcoin’s rebound to $72,000. The Coinbase premium index – which tracks the price difference between the US retail market and the global market average – is at 0.0227%, after a nearly two-month period of low demand reaching the level last seen in early December. This suggests that US retail investors are willing to buy Bitcoin at a premium.

On the other hand, the US government doubles down on its push for crypto. President Trump, in a press meeting on Wednesday, said, “In crypto, we want to be dominant.” This aligns with Trump’s Tuesday post that “They [US banks] need to make a good deal with the Crypto Industry because that’s what’s in the best interest of the American People.”