Institutional investors withdrew money in seven of eight major declines, but Bitcoin's crashes have become slower and less frequent, exposing a market-structure puzzle.

Bitcoin ETFs recorded outflows during seven of eight major selloffs, challenging expectations that Wall Street investors would support prices during downturns.

A new DWF Labs report shared with CryptoSlate found that US spot Bitcoin exchange-traded funds consistently lost money during market declines of at least 15% since their January 2024 launch, while attracting inflows throughout all nine major rallies.

The findings challenge the belief that institutional adoption has created a dependable source of buying during market stress. They also expose a paradox in Bitcoin's changing market structure: selloffs have become slower and less frequent, even as ETF investors continue withdrawing billions during downturns.

The research, covering 694 trading days through Oct. 16, found that investors withdrew a record $8.2 billion during Bitcoin's 28.8% decline between May and June 2026. That followed $6.9 billion in withdrawals during the October 2025 to February 2026 downturn, when the cryptocurrency lost nearly half its value.

The two episodes represented the largest ETF withdrawals since the products launched, surpassing the $3.4 billion investors redeemed during the January-April 2025 correction.

DWF Labs found that ETF investors were still withdrawing money at seven of eight market bottoms and purchasing at seven of eight peaks, suggesting institutional flows have largely reinforced existing price trends.

The selling frequently intensified as downturns progressed. In five of the eight corrections, the heaviest withdrawals occurred during the final five trading days before Bitcoin bottomed.

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