During the March and April 2026 downturn, Bitcoin saw a significant drop to approximately $78,000, which is around 38% lower than its peak of $125,761 on October 6. Despite this decline, US spot Bitcoin ETFs attracted $1.32 billion in March after experiencing four months of outflows and subsequently added another $2.42 billion from April 6 to April 22. The most substantial inflows were recorded on April 17 with $663.9 million and April 22 with $335.8 million.
Data from Gemini indicates that Bitcoin held by ETFs decreased slightly from 1.38 million BTC at its October 2025 high to 1.28 million during the trough, recovering quickly to 1.31 million thereafter. According to Bloomberg senior ETF analyst Eric Balchunas in an interview with Crypto Prime, ETF outflows remained under $1 billion even during a 20% drawdown, representing just 0.5% of their total assets amid challenging macroeconomic conditions.
Nasdaq’s March update showed that while the overall digital asset market cap decreased by 21% in Q1, the Nasdaq-100 and S&P 500 fell by only 4.9% and 5.1%, respectively. ETF investors absorbed these losses without triggering the anticipated exit wave, as Balchunas noted that selling pressure primarily came from longer-term crypto holders.
The resilience of US spot Bitcoin ETF inflows during this period suggests a different kind of buyer behavior compared to traditional crypto-native holders who may engage in discretionary sales. The structured nature of ETF investments means they operate within set parameters like model portfolios, advisor guidelines, and trading schedules, which promote discipline during market drawdowns.
A Bitwise and VettaFi advisor survey from 2026 highlighted that 32% of financial advisors included crypto allocations in client accounts, up from 22% the previous year. Meanwhile, EY-Parthenon and Coinbase’s institutional survey reported that 73% plan to increase their digital asset holdings, with 66% accessing spot crypto through ETFs or ETPs.
EY noted that increased volatility is fostering more formalized risk management practices. BlackRock endorsed Bitcoin allocations up to 2%, which can absorb a 38% drop without significantly affecting a diversified portfolio. This approach aligns with the view of slower, more measured buying strategies.
The distribution infrastructure for crypto investments continues to grow, exemplified by Bank of America’s inclusion of ETP recommendations across its platforms in January 2026. Morgan Stanley launched its Bitcoin ETF on April 8 after filing earlier that year, and Charles Schwab announced spot crypto trading availability.
In the bull case scenario, expanding advisor and institutional access may lead to smaller, long-term allocations for Bitcoin buyers, resulting in less selling pressure during future downturns. Citi’s optimistic forecast targets a $165,000 price by 2027 due to sustained institutional demand and favorable regulatory conditions.
Conversely, the bear case suggests that ETF discipline might only persist up to certain thresholds, beyond which macro stressors could trigger significant outflows. In such scenarios, Bitcoin may drop to $58,000 if US regulatory progress stalls.
The upcoming 20%-30% drawdown will serve as a critical test of whether ETF-held BTC contracts sharply or stabilizes swiftly, supporting Balchunas’s thesis on their market resilience.