Analysts are baffled as to why the trading volume of the Bitcoin ETFs offered by VanEck and WisdomTree unexpectedly increased.
Market observers are searching for the cause of the abrupt and sharp increase in trading volume seen in VanEck’s spot Bitcoin exchange-traded fund (ETF).
VanEck’s fund, which trades under the ticker “HODL,” saw $258 million in trading volume on February 20, up over 15 times from the day before, according to data that senior Bloomberg ETF analyst Eric Balchunas shared with X.
Rather than coming from a single huge investor, which he said “would make sense,” Balchunas pointed out that VanEck’s abrupt volume rise was caused by an influx of almost 32,000 individual trades, which was 60 times its usual.
Five hours later, Balchunas added in a follow-up X post, “Still haven’t figured out what happened.”
Nobody is aware. Considering how abrupt and dramatic the spike in trade volume was (500 deals on Friday, 50,000 trades today), I’m wondering if any kind of influencer on Reddit or TikTok suggested them to their audience. “Feels like a retail army,” he continued.
VanEck notified the US Securities and Exchange Commission on February 15 that it will reduce the fees for its exchange-traded fund (ETF) from 0.25% to 0.20% starting on February 21. This reduction is five basis points less than what the industry leaders, Fidelity and BlackRock, charge.
BlackRock, the largest fund issuer, promised to waive fees on its iShares fund up to $5 billion in aggregate assets under management. From February 15 onwards, BlackRock will impose fees of 0.25% on each new investment made into the fund.
According to Bloomberg data that Balchunas quoted, trading volumes on WisdomTree’s Bitcoin Fund (WBTC) were likewise “popping off,” with a roughly 1,200% increase from its average to $154 million in total daily volume on February 20.
On February 20, 23,000 distinct trades were executed on WBTC, a notable rise from the “mere 221 trades on Friday,” according to Balchunas.
Around the same period as “elevated but not crazy” volume on market-leading funds, such as BlackRock’s iShares Bitcoin ETF, there was an increase in trading volume across the HODL and WBTC funds.
According to Dune Analytics data, WisdomTree’s Bitcoin ETF is the smallest, with just $29.4 million in assets under management (AUM), while VanEck’s Bitcoin Trust is now the seventh-largest spot Bitcoin ETF, with $191.9 million in AUM.
