VanEck’s Bitcoin exchange-traded fund (ETF), known as HODL, has witnessed a sudden and significant surge in trading volume, leaving experts puzzled about the cause. On February 20, the fund saw a trading volume of $258 million, almost 15 times higher than the previous day. Senior Bloomberg ETF analyst Eric Balchunas shared this data. Interestingly, the spike in volume was not due to a single large investor but rather an influx of approximately 32,000 individual trades. Balchunas, in a follow-up post, expressed his confusion about the sudden surge and speculated that it could be related to a recommendation from a Reddit or TikTok influencer. He described the situation as “retail army-ish.”
This surge in trading volume comes after VanEck announced a reduction in its ETF fees from 0.25% to 0.20% starting February 21. This fee reduction places VanEck below market leaders BlackRock and Fidelity, who charge slightly higher fees. BlackRock, in particular, waived fees on its iShares fund until it reached $5 billion in assets under management (AUM). However, after reaching this milestone on February 15, BlackRock will now charge 0.25% fees on all new investments into its fund.
In addition to VanEck’s HODL fund, WisdomTree’s Bitcoin Fund (WBTC) also experienced a significant increase in trading volume. On February 20, WBTC witnessed a 1,200% surge in volume, reaching $154 million in total daily volume. This is a substantial increase compared to the mere 221 trades that occurred on Friday. Balchunas cited Bloomberg data to support these figures.
It is worth noting that while the HODL and WBTC funds experienced a surge in trading volume, the overall volume on market-leading funds, including BlackRock’s iShares Bitcoin ETF, remained elevated but not unusually high.
As of now, VanEck’s Bitcoin Trust is the seventh-largest spot Bitcoin ETF, managing $191.9 million in AUM. WisdomTree’s fund, on the other hand, is the smallest, with only $29.4 million in AUM, according to Dune Analytics data.
In conclusion, the sudden increase in trading volume for VanEck’s HODL and WisdomTree’s WBTC funds has caught the attention of market commentators, who are still uncertain about the exact cause. Balchunas speculates that it could be related to influencer recommendations on platforms like Reddit or TikTok. Nonetheless, both funds have seen significant trading activity amidst a larger market with elevated volumes.