VanEck Bitcoin ETF Sees Unexpected Surge in Trading Volume
The VanEck Bitcoin exchange-traded fund (ETF) experienced a surprising development on Tuesday, as its daily trading volume exceeded $258 million, a 14-fold increase in just one day. However, despite this achievement, VanEck’s ETF has struggled to keep up with the trading volumes of other competitors such as BlackRock, Fidelity, and Grayscale.
VanEck’s Performance Surprises Analysts
Bloomberg’s senior ETF analyst, Eric Balchunas, expressed surprise at VanEck’s exceptional performance. He noted that the fund saw a significant surge in trading activity, with daily volume reaching $258 million, a fourteen-fold increase over its average. Balchunas observed that this surge was driven by approximately 32,000 individual trades, representing a sixty-fold increase from its average.
Still haven’t figured out what happened. No one knows. Given how sudden and explosive the increase in number of trades was (500 trades Friday, 50,000 trades today) I’m wondering if some Reddit or TikTok influencer type recommended them to their followers. Feels retail army-ish.
— Eric Balchunas (@EricBalchunas) February 20, 2024
Despite the remarkable uptick in trading activity, Balchunas admitted uncertainty regarding the cause behind this surge. He speculated that it could be attributed to influence from online communities like Reddit or TikTok, suggesting a possible influence from retail investors.
VanEck Cuts Fees to Attract Investors
Last week, VanEck announced that it would be reducing its fee from 0.25% to 0.20% on February 21. This decision has fueled investor interest in the fund and brought more engagement from retail investors. In comparison, BlackRock and Fidelity charge a fee of 0.25%.
Additionally, WisdomTree’s Bitcoin Fund (WBTC) has also experienced a surge in trading volumes, with a total daily volume of $154 million on February 20, a 1,200% increase from the average volume. VanEck’s Bitcoin Trust currently ranks as the seventh-largest spot Bitcoin ETF, while WisdomTree’s fund holds the smallest assets under management (AUM).
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