Key Takeaways
- • DWF Labs research found US spot Bitcoin ETF flows are a lagging indicator: investors pulled money from the funds in seven of eight Bitcoin sell-offs of at least 15%, and all nine rallies of that size drew net inflows.
- • Daily ETF flows showed a correlation of 0.54 with Bitcoin's price changes over the prior five sessions, but only 0.03 with the following five sessions, offering almost no predictive value.
- • Net outflows totaled $6.9 billion from October 2025 to February 2026 and $8.2 billion during the May–June decline, the two most recent sell-offs.
- • Bitcoin sell-offs of 15% or more have fallen to about three per year since the ETFs launched in January 2024, versus roughly four a year in 2022–2023 and eight in 2021.
- • DWF does not separate institutional from retail sellers, and estimates roughly a fifth of ETF flows may be hedged via CME futures basis trades.
Summary
DWF Labs, in a research report published Thursday and reported by TradingView (originally Cointelegraph), concludes that US spot Bitcoin ETF daily flows are not a reliable guide to Bitcoin's next move. Investors tended to add money to the funds after price gains and withdraw it after declines. DWF reviewed 694 trading days since January 2024, when the ETFs first launched in the US. The firm's summary: "ETF flows confirm moves; they don't predict them."
The data show a moderate relationship between flows and prior price action, with a correlation of 0.54 over the preceding five trading sessions. The correlation with the following five sessions was 0.03, which DWF characterizes as almost no predictive power. Of the eight Bitcoin drops of at least 15%, investors pulled money from the funds in seven. All nine rallies of that size drew net inflows.
The largest withdrawals came in the two most recent sell-offs: a net $6.9 billion between October 2025 and February 2026, and $8.2 billion during the May–June decline. The report does not show whether institutions or retail investors drove the selling, and DWF said it did not separate the two groups. A DWF spokesperson told Cointelegraph, "We don't have a clear split on the exact buyers/sellers of the ETFs." DWF also estimated that roughly a fifth of flows may reflect investors buying fund shares while shorting Bitcoin through CME futures to capture the basis, though its data could not confirm that the same participants held both sides.
The report also finds that Bitcoin sell-offs have become less frequent and more gradual. Since the ETFs launched, Bitcoin has averaged about three sell-offs of 15% or more per year, compared with roughly four a year in 2022–2023 and eight in 2021. The median sell-off wiped out 21.3%, versus 19.4% in 2022–2023, so losses remain comparable in size. DWF's spokesperson said the changes are not solely due to the ETFs, noting that volatility and sell-off frequency were already declining before the funds launched.
A CoinShares analysis published in June, cited in the piece, found that professional investors cut their Bitcoin ETF exposure by 17% in the first quarter of 2026, with hedge funds and brokerages accounting for roughly 96% of the reduction while banks increased holdings.
The data show a moderate relationship between flows and prior price action, with a correlation of 0.54 over the preceding five trading sessions. The correlation with the following five sessions was 0.03, which DWF characterizes as almost no predictive power. Of the eight Bitcoin drops of at least 15%, investors pulled money from the funds in seven. All nine rallies of that size drew net inflows.
The largest withdrawals came in the two most recent sell-offs: a net $6.9 billion between October 2025 and February 2026, and $8.2 billion during the May–June decline. The report does not show whether institutions or retail investors drove the selling, and DWF said it did not separate the two groups. A DWF spokesperson told Cointelegraph, "We don't have a clear split on the exact buyers/sellers of the ETFs." DWF also estimated that roughly a fifth of flows may reflect investors buying fund shares while shorting Bitcoin through CME futures to capture the basis, though its data could not confirm that the same participants held both sides.
The report also finds that Bitcoin sell-offs have become less frequent and more gradual. Since the ETFs launched, Bitcoin has averaged about three sell-offs of 15% or more per year, compared with roughly four a year in 2022–2023 and eight in 2021. The median sell-off wiped out 21.3%, versus 19.4% in 2022–2023, so losses remain comparable in size. DWF's spokesperson said the changes are not solely due to the ETFs, noting that volatility and sell-off frequency were already declining before the funds launched.
A CoinShares analysis published in June, cited in the piece, found that professional investors cut their Bitcoin ETF exposure by 17% in the first quarter of 2026, with hedge funds and brokerages accounting for roughly 96% of the reduction while banks increased holdings.
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