By
Chimamanda U. Martha
April 26th, 2024
Fortunately for VanEck, its decision to crash management fees to 0% until next year attracted record inflow for the company.
Global investment manager VanEck has recorded an all-time high (ATH) in inflow for its spot Bitcoin (BTC) exchange-traded fund (ETF) after the company suspended its management fee. According to data from BitMEX Research, the VanEck Bitcoin Trust ETF (HODL) saw $119 million in new inflows, a record for the ETF issuer since launching the product in January.
VanEck Record Inflow Came after Suspending Fees
On Monday, VanEck announced its decision to waive management fees on HODL for up to a year. In an X post, the ETF issuer noted that the action is “because we believe in Bitcoin so much”. VanEck, already charging one of the lowest spot BTC ETF fees, announced that there will be no fees until March 31, 2025, unless the ETF’s assets under management (AUM) cross $1.5 billion before then. The $118.8 million HODL received is the largest-ever for the ETF and a 736% spike from its second-largest of $14.2 million recorded on January 19.
BitMEX data now shows that VanEck’s HODL has become the sixth-largest spot Bitcoin ETF, with more than 6,000 BTC, about $441.5 million at current prices. This puts HODL ahead of Invesco’s BTCO and Valkyrie’s BRRR.
Weeks ago, VanEck had announced a fee reduction for HODL, from 0.25% to 0.20%. At the time, HODL had $187.74 million in total AUM and was expected to become more competitive after the reduction. A spokesperson noted that VanEck decided on the reduction due to its commitment to provide value and access to investors.
However, there are speculations that the real reason for VanEck’s fee reduction and eventual suspension is its low inflows. As of the announcement to suspend fees, VanEck’s AUM was at $305 million. This was much lower than others like BlackRock’s IBIT and Fidelity’s FBTC, which had both crossed $1 billion. On the day of VanEck’s record inflows, both ETFs recorded net inflows of $562.9 million and $215.5 million, respectively.
Grayscale and BlackRock in the ETF Market
Unfortunately, Grayscale Investments’ GBTC ETF is still recording heavy outflows. In fact, BitMEX data shows that the ETF has not recorded any net positive inflows since trading began in January. On January 22, the ETF recorded its largest net outflow, at $640.5 million. The second-largest outflow was $598.9 million on February 29.
Last week, BlackRock asked the United States Securities and Exchange Commission (SEC) for permission to add its spot BTC ETF to its “Global Allocation Fund.” The fund, with nearly $18 billion in assets under management (AUM), has returned 4.61% in year-to-date (YTD) gains as of March 7. BlackRock has also filed with the SEC, informing the agency of its intention for its Strategic Income Opportunities Portfolio to invest in Bitcoin via the ETFs. The fund controls $36.7 billion in AUM.
In January, the Cboe applied to the SEC, seeking permission to trade options on Bitcoin ETFs. However, the SEC has delayed making a decision until April.
