Bitcoin Sell-Off Triggers Bargain Prices for ETF Investors – Can it Push BTC Price Back to $70,000?

• Bitcoin ETF share price dropped to a four-month low last Friday offering long-term investors an opportunity to accumulate shares at a discount.
• Bitcoin spot ETFs experienced a substantial net inflow of $295 million on July 8, the highest in 21 days.

The massive sell-off in the Bitcoin price could allow long-term investors to accumulate the spot Bitcoin ETF shares at a massive discount. Amid the massive BTC liquidations taking place due to the current sell-off by the German government as well as the repayment to Mt. Gox creditors, the BTC price dived to $53,500 on Monday. However, in the past 24 hours, the BTC price has partially recovered and is currently trading at $57,400 levels with a market cap of $1.1 trillion.

Amid this BTC price correction, shares of the top Bitcoin ETFs are already feeling the heat with their price dropping to a four-month low as of last Friday. Since its launch this January, Bitcoin ETFs have proved to be the gold standard for long-term BTC investors as they provide a regulated environment to seek exposure to the asset class.

Since their launch, the shares of spot Bitcoin ETFs have constantly traded above their net asset value – the value of the fund’s underlying spot BTC holdings – driven by strong institutional demand for Bitcoin. As of early July, the top five Bitcoin funds have maintained an average premium of nearly 1%.

However, during May, there were major fluctuations in the premium. For a brief period, BlackRock’s IBIT saw its share price dipping to a discount of nearly 2% with institutional investors rebalancing their holdings at the end of the month amidst the market volatility. Similarly, other funds like FBTC, BITB, and ARK 21Shares Bitcoin ETF (ARKB) traded at a 1.5% discount during the same period, per the CNF report.

Bitcoin ETF Inflows Bounce Back

As the Bitcoin ETF shares dropped to a four-month low last Friday, long-term investors made the most of the opportunity by pouring a staggering $438 million into US Bitcoin ETFs in the last two trading sessions, per the CNF update.

On July 8, Bitcoin spot ETFs experienced a substantial net inflow of $295 million, marking the highest inflow in the past 21 days. Interestingly, this happened when the German government conducted a significant Bitcoin sale, offloading $915.3 million worth of BTCs.

On the same day, several major Bitcoin ETFs saw notable single-day inflows: Grayscale’s GBTC received $25.0753 million, BlackRock’s IBIT attracted $187 million, and Fidelity’s FBTC recorded an inflow of $61.5378 million. In a note to investors, Charlie Morris, chief investment officer at ByteTree, wrote:

So many investors still don’t own Bitcoin, and that underpins the long-term bull case. This supply storm will soon pass.

As reported by Crypto News Flash, Germany’s government and Mt. Gox are preparing to release billions of dollars worth of BTC into the market, heightened volatility is expected. Investors should watch for large ETF arbitrages in the coming months, particularly focusing on EZBC, HODL, and IBIT. These ETFs, backed by blue-chip asset managers, are offering significant discounts on management fees, with some waiving fees entirely until 2025.