In an unexpected market twist, VanEck’s Bitcoin ETF, known by its ticker “HODL,” witnessed a staggering 1,400% increase in daily trading volume on February 20th. Market analysts are scratching their heads, trying to decode the sudden surge to $258 million from the previous day’s figures.
This explosive growth wasn’t attributed to the actions of a single investor but rather an astonishing influx of approximately 32,000 individual trades. Eric Balchunas, a senior Bloomberg ETF analyst, highlighted the abnormality, noting the volume was 60 times the norm. The surge’s origin remains a puzzle, with Balchunas speculating on social media’s potential role in rallying a “retail army” to the fund.
The phenomenon coincided with VanEck’s announcement of a fee reduction for its ETF, undercutting industry giants BlackRock and Fidelity by 5 basis points. This move to a 0.20% fee came just as BlackRock reinstated a 0.25% fee on its iShares Bitcoin ETF after achieving a significant asset milestone.
Additionally, WisdomTree’s Bitcoin Fund (WBTC) also saw a remarkable volume increase, jumping 1,200% to $154 million in trading volume on the same day. This spike was driven by 23,000 trades, vastly exceeding the usual activity.
These dramatic increases in trading volumes, particularly for VanEck’s HODL and WisdomTree’s WBTC funds, occurred amidst an overall heightened but not unprecedented market activity. Currently, VanEck’s Bitcoin Trust ranks as the seventh-largest spot Bitcoin ETF, with $191.9 million in assets under management, while WisdomTree’s fund, despite its recent surge, remains the smallest with $29.4 million AUM.
As the market digests these unexpected developments, the cause behind the sudden and significant trading volume increases continues to elude experts, leaving room for speculation and intrigue.