VanEck’s HODL, an American-listed bitcoin ETF, saw its trading volume take off sharply on Tuesday as retail investors poured into the fund. The ETF that tracks the spot price of bitcoin saw volumes over $400 million, a 2,200% rise from its daily average of $17 million. The move came ahead of scheduled fee reduction for the fund, which will lower its expense ratio from 0.25% to 0.20% on Wednesday.
11 bitcoin ETFs were given the green light by the SEC on January 10th, 2024, after years of regulatory uncertainty and delays. The objective of the fund is to give investors access to the largest and most liquid cryptocurrency without any need for them to purchase, store, or secure it themselves.
In the case of HODL, the third-highest bitcoin ETF trading volume was recorded on Tuesday, as per blockworks data. This followed behind GBTC and IBIT by Grayscale and BlockRock, respectively, which are leading in this field. Moreover, the number of its shares has grown to almost $200 million by February 20th, thereby making it one of the most capital-rich Bitcoin ETFs ever.
ETF Surge Sparks Retail Investor Speculation
Though the sudden jump in HODL’s volume is not clear, some analysts think it might have been driven by retail investors that social media or online platforms could have influenced. Bloomberg Intelligence senior ETF analyst Eric Balchunas stated on X that the volume came from 32K individual trades rather than a single large buyer.
Given how sudden and explosive the increase in the 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, said Balchunas.
In the stock market, as well as in the crypto market, retail investors have been widely recognized for inciting huge movements by collaborating together on platforms such as Reddit’s WallStreetBets or TikTok’s CryptoTok. In January 2024, a group of small traders made the shares of GameStop, a game retailer that was already struggling, shoot up in price dramatically through buying call options and squeezing out short sellers.
The rise in HODL’s volume shows how bitcoin ETFs are becoming popular among investors who prefer regulated channels of investing in this digital asset. Investors have poured billions into Bitcoin ETFs ever since they were launched to cash on its price ascent and volatility.
Bitcoin, the leading cryptocurrency, has been on a bull run since late 2023 and hit new highs above $52,000 in February 2024. The digital currency has been helped by a number of things, including more institutional adoption, regulating clarity, as well as invention and scarcity.
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