Bitcoin ETFs sold in 7 of 8 big crashes, DWF Labs finds
A DWF Labs report says US spot Bitcoin ETFs saw outflows in nearly every major selloff since launch, undercutting the idea that Wall Street buys the dip.
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Key takeaways
- US spot Bitcoin ETFs saw outflows in 7 of 8 selloffs of 15% or more since January 2024
- The finding comes from a DWF Labs report shared with CryptoSlate
- The data challenges the belief that institutional ETF money steadies prices in downturns
- The report's other findings were cut off in the available summary
Seven out of eight. That's how often US spot Bitcoin ETFs bled money during a major selloff, per a new DWF Labs report. The funds launched in January 2024. So much for catching the falling knife.
What the report found
DWF Labs shared the research with CryptoSlate. The team looked at market declines of at least 15% and checked what the ETFs did in each one. The answer was almost always the same. Money went out, not in.
That runs against a popular bet. Plenty of traders figured Wall Street would treat dips as a sale and cushion the drop. Seven of eight says no.
The report also says the funds drew inflows in other stretches. But the summary I've seen cuts off, so I can't give you the details. The original CryptoSlate headline suggests Wall Street still makes selloffs less violent overall. How the report gets there? I can't verify it from what I have.
Why it matters
Holding Bitcoin? Don't treat ETF demand as a safety net. These funds look more like a mirror of sentiment than a backstop. Investors pile in when markets are calm or rising, then head for the exit when things get ugly.
For traders, ETF flows are worth watching as a stress signal, not a floor. The open question is the one exception. Fluke, or the start of a new pattern as these products mature? Nobody knows yet.
Source: CryptoSlate
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