Crypto markets edged higher on Wednesday, lifted by a wave of renewed investor optimism fueled by pro-crypto signals from U.S. policymakers and President Donald Trump.

Both Bitcoin (BTC) and Ethereum (ETH) are up nearly 2% on the day, trading at $115,000 and $3,700, respectively. Other large-cap altcoins also posted modest gains: XRP edged up to $3.01 while Solana (SOL) climbed 3.4% to just under $170.

The total cryptocurrency market capitalization has risen 1.5% on the day to around $3.84 trillion, according to CoinGecko. Trading volume over the same timeframe reached $131 billion.

Over the past 24 hours, more than $216 million in crypto positions were liquidated, according to CoinGlass, with long and short positions nearly evenly split at around $108 million each. ETH led the liquidations with nearly $68 million, followed by BTC and altcoins at approximately $25 million each.

ETF Inflows/Outflows

In the exchange-traded fund (ETF) sector, spot Bitcoin ETFs recorded $196 million in outflows on Aug. 5, marking the fourth consecutive day of outflows – which includes the second-largest single-day outflows of over $812 million on Friday, Aug. 1.

In contrast, ETH ETFs recorded $73 million inflows on Aug. 5. This comes one day after the funds experienced their largest-ever single-day outflows on Aug. 4, when approximately $465 million was withdrawn, according to SoSovalue.

These flows also come around three weeks after ETH ETFs recorded their highest daily inflows to date.

Improved Sentiment

Experts say recent price gains reflect a rebound in investor sentiment, fueled by positive regulatory signals and pro-crypto policy developments in the U.S.

On Tuesday, the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued a statement clarifying that certain liquid staking activities are not considered securities. While the statement reflects only the Division’s view and carries no legal weight, analysts say it helped lift market sentiment by potentially reducing uncertainty.

The statement has “revived expectations for Ethereum-based ETFs that offer staking exposure,” Christopher Tahir, a senior market strategist at Exness, said in comments shared with The Defiant. “Ethereum ETFs saw a return of inflows, which could help support the asset.”

Also on Tuesday, news emerged that President Trump plans to sign an executive order sometime this week to protect crypto users and firms from debanking (the practice of banks denying service based on perceived risk).

Meanwhile, on Monday, Bloomberg reported that the SEC issued guidance stating stablecoins backed by U.S. dollars with guaranteed 1:1 redemption could be classified as cash equivalents; however, some experts warn this move could unintentionally dampen innovation.

On the same day, the U.S. Commodity Futures Trading Commission (CFTC) unveiled plans for an initiative to enable trading of spot crypto asset contracts on futures exchanges registered with the agency.

"Spot trading is how most people enter crypto. CFTC oversight could be a game changer for U.S. markets, boosting investor confidence, encouraging institutional participation, and raising standards for transparency and integrity,” said Roshan Robert, the CEO of OKX U.S., in comments shared with The Defiant. “It’s a critical step toward making U.S. crypto safer, fairer, and more globally competitive."