Daily transaction volume reached $300 million, an increase of over 1000%

Daily trading volume for VanEck’s spot Bitcoin ​ETF has surged to over $300 million, an increase of over 1000% compared to the previous highest trading day.

VanEck ETF surges after fee cut announcement

On Tuesday, VanEck’s Spot Bitcoin ETF (ticker HODL) topped $300 million in trading volume as of 1:50 PM ET. This is more than 10 times the volume on our best day to date. This development comes less than a week after VanEck announced that it would lower the fees it charges on spot Bitcoin ETFs.

The Bitcoin-based ETF, which launched on January 11 following landmark approval from the SEC, recorded its previous highest daily trading volume with $25.5 million registered on the day of launch. However, this trading instrument surpassed this limit on February 20, 2024, after reaching a record daily trading volume worth $258 million. The significant increase in daily trading volume is almost 14 times higher than the daily average.

BTC ETF records increased number of transactions

It is also interesting to note that the sharp increase in trading volume was not caused by a single large investment, but by more than 32,000 individual transactions, 60 times the average number of daily transactions.

According to Ed Lopez, head of ETFs at VanEck:

“Because ETFs are traded on the secondary market, it can be difficult to know who is buying an ETF and why. “Trading today is showing huge volume at tight spreads, which is ultimately what you want from an ETF, regardless of whether the market is bullish or bearish.”

Analyst Balchunas’ Perspective

Senior analyst Eric Balchunas, who first pointed out the development in his X.com profile, offered a plausible explanation for HODL’s surging daily trading volume.

“No one knows. Considering how sudden and explosive the increase in transaction numbers was (500 transactions Friday, 50,000 today), I wonder if any Reddit or TikTok influencer types have been recommending transactions to their followers. It feels like a retail army. “I take it.”

Balchunas also pointed out that WisdomTree’s Bitcoin Fund (WBTC) trading volume also experienced a significant surge on February 20, increasing approximately 1200% at an average of $154 with 23,000 individual transactions.

Market situation and background

On February 15, VanEck filed a notice of intent with the U.S. Securities and Exchange Commission (SEC) to reduce ETF fees from 0.25% to 0.20% effective February 21. With this adjustment, VanEck’s fees are 5 basis points lower than before. Market leaders BlackRock and Fidelity join us.

The spike in trading volume for HODL and WBTC funds coincided with a period of increased, if not excessive, volume for major market funds such as BlackRock’s iShares Bitcoin ETF.

VanEck’s Bitcoin Trust ranks as the 7th largest Bitcoin ETF, with $191.9 million worth of assets under management, according to data from Dune Analytics. In contrast, WisdomTree’s fund has the smallest position, with just $29.4 million in assets under management (AUM).

Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.

Source: https://cryptodaily.co.uk/2024/02/vanecks-hodl-etf-soars-300m-daily-trades-up-over-1000