VanEck’s Bitcoin exchange-traded fund (ETF), also known as HODL, experienced a sudden surge in trading volume, leaving analysts puzzled about the cause. On February 20, the fund saw a trading volume of $258 million, which was almost 15 times higher than the previous day. This increase in volume was attributed to around 32,000 individual trades, which is 60 times higher than the fund’s average. It was not the result of a single large investor, which would have been expected.
Eric Balchunas, a senior Bloomberg ETF analyst, expressed his confusion about the sudden increase in volume and speculated that it could be due to a recommendation from a Reddit or TikTok influencer. He described it as a “retail army-ish” phenomenon. Balchunas mentioned that he hadn’t found a concrete explanation for the surge even after five hours of analyzing the data.
On February 15, VanEck announced that it would lower the fees for its ETF from 0.25% to 0.20%, starting from February 21. This fee reduction puts VanEck below the fees charged by market leaders BlackRock and Fidelity. BlackRock had previously waived fees on its iShares fund until it reached $5 billion in assets under management (AUM). After reaching that milestone on February 15, BlackRock will now charge a 0.25% fee on new investments into its fund.
WisdomTree’s Bitcoin Fund (WBTC) also experienced a significant increase in trading volume. On February 20, its total daily volume reached $154 million, which is approximately 1,200% higher than its average. This surge in volume was accompanied by 23,000 individual trades, a notable increase from the previous day’s 221 trades.
The increase in trading volume for both the HODL and WBTC funds occurred while the market-leading funds, including BlackRock’s iShares Bitcoin ETF, also experienced elevated volumes. Currently, VanEck’s Bitcoin Trust is the seventh-largest spot Bitcoin ETF with $191.9 million in AUM, while WisdomTree’s fund is the smallest with $29.4 million in AUM, according to Dune Analytics data.
Overall, the sudden surge in trading volume for VanEck’s HODL ETF and WisdomTree’s WBTC fund remains a mystery, with analysts speculating about the possible reasons behind it.