DWF Labs found that daily flows into US spot Bitcoin exchange-traded funds (ETFs) respond to earlier Bitcoin price changes rather than reliably predict future returns. DWF published the research on Thursday. The study examined 694 trading days beginning in January 2024, when Bitcoin ETFs launched in the United States.
DWF found net withdrawals during seven of eight Bitcoin price declines of at least 15%. All nine price increases of at least 15% attracted net inflows, according to DWF. The research found that investors generally bought ETF shares after Bitcoin rose and withdrew money after Bitcoin fell. DWF said the evidence mainly showed investors responding to prices rather than determining prices.
DWF measured a correlation of 0.54 between daily ETF flows and Bitcoin price changes during the preceding five trading sessions. The correlation with price changes over the subsequent five days was 0.03, with zero indicating no relationship. The flows provided almost no indication of whether Bitcoin would gain or lose value over the next five days.
The largest withdrawals occurred during the two latest sell-offs. Investors withdrew a net $6.9 billion from October 2025 through February 2026. Investors then withdrew $8.2 billion during the May-June decline. The figures do not identify whether institutional or retail investors drove the withdrawals. DWF did not analyze the groups separately, and a DWF Labs spokesperson said the identities of the exact buyers and sellers were unclear.
Some investors buy ETF shares and simultaneously bet against Bitcoin using CME futures to profit from the price difference between the positions. DWF estimated that about one-fifth of flows may have involved this hedging strategy. However, DWF's data could not establish whether the same investors held both positions.
CoinShares found in an analysis published in June that professional investors cut Bitcoin ETF exposure by 17% during the first quarter of 2026. CoinShares attributed roughly 96% of that reduction to hedge funds and brokerages. However, banks increased Bitcoin ETF holdings.
DWF found that Bitcoin has experienced about three declines of at least 15% annually since the ETFs launched. The annual frequency was roughly four in 2022-2023 and eight in 2021. The research found that declines have become more gradual. However, losses remain comparable: the median decline since the ETF launches was 21.3%, versus 19.4% in 2022-2023. The DWF Labs spokesperson said ETFs were not solely responsible for the changes because volatility and sell-off frequency had already been decreasing before the funds launched in 2024.
Bitcoin ETF Flows Follow Price Changes, Not Predict Future Returns: DWF Labs
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Summary
Bitcoin price today remains a key factor influencing flows into US spot Bitcoin ETFs, according to a DWF Labs study using FLASH AI. The analysis of 694 trading days since January 2024 shows that ETF inflows follow Bitcoin price changes, not predict future returns. Investors tend to buy after price rises and sell after declines. Correlation with prior price changes was 0.54, while future Bitcoin price prediction showed near-zero at 0.03.
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