Bitcoin ETFs were supposed to make selloffs less painful. That theory is being put to the test.

Theory Briefing

• Bitcoin ETF approval was celebrated as a sign that institutional money would stabilize crypto during downturns, not just amplify gains.
• A crypto-friendly administration added to hopes that Bitcoin had finally outgrown its boom-bust reputation.
• The current selloff is the first serious stress test of whether institutional adoption actually changes how Bitcoin behaves in a crisis.
• If ETF holders panic-sell just like retail traders, the stabilization theory collapses — but the verdict isn't in yet.