The volume of VanEck’s ETF saw a significant spike following the firm’s preparation to reduce its fee, giving the product an advantage.
By Tolu Ajiboye
Edited by Julia Sakovich
Updated
3 mins read
VanEck’s spot Bitcoin (BTC) exchange-traded fund (ETF) $HODL has witnessed a heavy spike in trading volume only a few days after it decided to lower its fees. On Tuesday, February 20, the firm’s ETF recorded more than $300 million worth of trading volume as of 13:50 ET. This was several times more than its best day since the United States Securities and Exchange Commission (SEC) officially approved spot Bitcoin ETF trading.
Bloomberg Senior ETF Analyst Eric Balchunas disclosed the feat in an X post he sent yesterday at 11:57 ET. According to him, the figures from VanEck’s ETF were from several thousand trades instead of one from a whale:
“$HODL is going wild today with $258m in volume already, a 14x jump over its daily average, and it’s not one big investor (which would make sense) but rather 32,000 individual trades, which is 60x its avg. Not sure how to explain…maybe it was added to a platform over wknd?”
On January 11, VanEck had its previous daily trading volume record, hitting $258 million on the day. Generally, the ETF has not been among the highest in net inflows. On most days, BlackRock Inc’s $IBIT ETF has seen the most activity, followed by the $FBTC from Fidelity Investments.
“Because ETFs trade on the secondary market, it can be challenging to know who or why someone buys an ETF. 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,” said Ed Lopez, VanEck’s Head of ETF Product.
VanEck’s decision to reduce its fee likely contributed significantly to trading activity on $HODL, one of the least-traded ETFs so far. This decision now extends the fee wars that have been going on among the issuers since before the SEC’s approval. Interestingly, VanEck’s 0.25% fee before the reduction is higher than the 0.12% fee BlackRock charges.
At 1.5%, Grayscale Investments’ $GBTC has the highest fee. Unfortunately, the $GBTC ETF has been recording heavy net outflows since the SEC’s approval, including $137 million yesterday, according to data from BitMEX Research. The reduction in $HODL’s fee from 0.25% to 0.20% might attract more attention to the ETF, especially with yesterday’s record figure.
Last month, the WisdomTree Bitcoin Fund ($BTCW) and the Invesco Galaxy Bitcoin ETF ($BTCO), lowered their fees to 0.35% and 0.39%, respectively. The issuers began their fee wars before approval with low fees and waivers. For instance, the Bitwise Bitcoin ETP Trust ($BITB) set its fee at 0.20%, and postponed charges until after 6 months or until the ETF amasses $1 billion. The ARK 21Shares ETF ($ARKB) set a fee of 0.25%, also with the same waiver conditions. For BlackRock, the giant asset manager’s iShares Bitcoin Trust had set its fee between 0.20% and 0.30%, with a waiver lasting 12 months, or until its $IBIT hits $5 billion.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
