DWF Labs Says AI Increase Coincides With Bitcoin ETFs’ First $5.4 Billion Half-Yr Loss
Spot bitcoin exchange-traded funds (ETFs) have recorded their first shedding half-year, breaking a streak of regular accumulation that had outlined the class since launch.
In keeping with evaluation by DWF Labs, bitcoin ETFs ended the primary half of 2026 with $5.4 billion in internet outflows. The reversal got here after two years of largely uninterrupted demand, throughout which cumulative internet flows had reached $56.6 billion initially of the 12 months.
The primary quarter opened weak. January erased $1.6 billion in flows, and by Feb. 23 cumulative internet inflows had fallen to $53.8 billion. That represented a $2.8 billion drawdown in lower than eight weeks.
April briefly restored confidence. Cumulative flows recovered to $59.8 billion by Might 6, helped virtually completely by Blackrock’s IBIT, which DWF Labs stated accounted for 99.6% of the class’s April influx. However the restoration pale shortly.
From Might 15 to June 3, bitcoin ETFs suffered 13 straight buying and selling classes of outflows, the longest such streak since spot merchandise launched. The run pulled $4.4 billion from the class and erased April’s positive aspects.
IBIT Strikes From Magnet to Supply of Redemptions
Blackrock’s IBIT stays the dominant bitcoin ETF by historic flows. Since launch, the fund has attracted $60.3 billion in internet inflows, or 3.3 occasions the whole of each different fund, excluding Grayscale’s GBTC, mixed.
DWF Labs stated IBIT grew to become the default institutional car for bitcoin publicity, regardless of not having the bottom payment, due to Blackrock’s distribution attain throughout allocators and funding platforms.
For a lot of the ETF period, IBIT and different lower-cost funds absorbed outflows from GBTC, which has misplaced $27.1 billion due to its 1.5% payment and years of trapped holders exiting after conversion.
That sample broke in 2026.
IBIT recovered in March and April, then noticed heavy redemptions in Might and June. DWF Labs stated the fund posted $5 billion in internet outflows throughout these two months alone, greater than all earlier IBIT outflow months mixed.
Ether ETFs Comply with the Identical Path
The weak point was not restricted to bitcoin. Spot ether ETFs additionally ended H1 2026 in damaging territory for the primary time since launch, with $1.47 billion in internet outflows throughout 123 buying and selling days. The interval included 73 damaging days and 49 constructive days.
Cumulative ether ETF inflows stood at $10.9 billion on June 30, down 28% from their October 2025 peak of $15.1 billion. That October peak additionally marked the month bitcoin ETFs started their very own 18.4% drawdown.
DWF Labs famous that staked ether ETFs have gained traction since U.S. regulatory steering in 2025 cleared the way in which for protocol staking in sure merchandise. Grayscale activated staking on ETHE and its mini belief, 21Shares started staking distributions on TETH, and Blackrock launched ETHB in March.
Nonetheless, inflows into yield-bearing merchandise weren’t sufficient to offset broader promoting.
DWF Labs stated institutional and retail enthusiasm has cooled as AI captures a bigger share of capital and a focus. Even so, the agency famous that about $80 billion stays in bitcoin ETFs, a lot of it from traders who beforehand lacked quick access to BTC publicity.
DWF commented that, “The flows replicate broader sentiment towards crypto as an asset class. The basics for crypto have by no means been stronger.”
The message is cautious, not fatalistic. ETF flows have turned, however the infrastructure round crypto is deeper than in prior cycles.
