VanEck's Bitcoin ETF Records 1,400% Surge in Daily Trading Volume

VanEck’s spot Bitcoin exchange-traded fund (ETF), tagged with the symbol “HODL,” witnessed a significant surge in trading volume on February 20, soaring nearly 15 times compared to the previous day. The uptick, totaling $258 million, was fueled by approximately 32,000 individual trades, a staggering 60 times its usual average, rather than a substantial investment from a single large player, as one might expect.

Despite efforts to discern the cause, senior Bloomberg ETF analyst Eric Balchunas remains perplexed, stating, “Still haven’t figured out what happened.” In a subsequent post, he speculated on the possibility of a Reddit or TikTok influencer recommending the ETF to their followers, considering the abrupt and explosive spike in trade numbers (500 trades on Friday, 50,000 trades today), giving it a retail-driven vibe.

Adding to the intrigue, on February 15, VanEck submitted a notice to the United States Securities and Exchange Commission, announcing a reduction in fees for its ETF from 0.25% to 0.20%, effective February 21. This adjustment positions VanEck’s fees 5 basis points below those charged by market leaders BlackRock and Fidelity.

BlackRock, the prominent fund issuer, committed to waiving fees on its iShares fund until it reached $5 billion in assets under management (AUM). Following the achievement of this milestone on Feb. 15, BlackRock has implemented a 0.25% fee on all new investments into its fund.

Simultaneously, trading volumes for WisdomTree’s Bitcoin Fund (WBTC) experienced a notable surge, with a staggering approximately 1,200% increase from its average, reaching a total daily volume of $154 million on Feb. 20, according to Bloomberg data highlighted by Balchunas. The WBTC observed 23,000 individual trades on Feb. 20, marking a significant rise from a mere 221 trades on the preceding Friday.

The heightened trading activity in both the HODL and WBTC funds coincided with a period of “elevated but not crazy” volume on leading funds, including BlackRock’s iShares Bitcoin ETF.

VanEck’s Bitcoin Trust presently holds the position as the seventh-largest spot Bitcoin ETF, managing $191.9 million in AUM, while WisdomTree’s fund is the smallest, with just $29.4 million in AUM, as per data from Dune Analytics.