VanEck on wild HODL spike: ‘what you’d want from an ETF’

Bitcoin exchange-traded funds show no signs of slowing down after record inflows over the past week.

VanEck’s Bitcoin ETF, whose ticker symbol is HODL, experienced a spike in trading volume on Tuesday, which stumped at least one analyst.

The fund had seen over $250 million in volume by midday in New York, which was about 14 times above its daily average, according to Eric Balchunas, an ETF analyst at Bloomberg Intelligence. The spike wasn’t due to one big investor, though. There were 50,000 individual trades for the day.

Balchunas wasn’t sure how to explain the spike, but suggested the fund might have been added to a new platform over the long weekend.

“I’ve never seen a grassroots trading explosion come out of nowhere like this,” Balchunas said.

Shortly after the close Balchunas said the “sudden and explosive” increase from 500 trades on Friday to 50,000 trades on Tuesday, could be due to increased activity from retail investors. ”I’m wondering if some Reddit or TikTok influencer type recommended them to their followers. Feels retail army-ish,” Balchunas said.

Because ETFs trade on the secondary market, “it can be challenging to know who or why someone buys an ETF,” Ed Lopez , VanEck’s head of product management, told DL News via email.

“We’ve publicly filed to lower HODL’s fee,” Lopez said, referring to the firm’s decision to lower its management fee to 0.2% from 0.25%. This change will come into effect tomorrow, according to a regulatory filing.

VanEck has also seen “strong interest” in its fund and Bitcoin ETFs more broadly, Lopez said, “including great engagement from retail investors.”

“Today’s trading has sported great volume at tight spreads, which is ultimately what you’d want from an ETF, whether you’re bullish or bearish on the market,” Lopez concluded.

Adam Morgan McCarthy is a market correspondent at DL News. Got a tip? Email him at adam@dlnews.com.