VanEck's spot Bitcoin exchange-traded fund (ETF) has witnessed a sudden and significant surge in trading volume, prompting market analysts to search for the underlying cause.

According to data provided to X by senior Bloomberg ETF analyst Eric Balchunas, VanEck's "HODL" fund recorded $258 million in trading volume on February 20, marking a nearly 15-fold increase compared to the previous day.

The surge in volume was driven by approximately 32,000 individual trades, which Balchunas highlighted as 60 times the fund's average trading activity.

Notably, the spike did not originate from a single large investor, a scenario Balchunas suggested would be expected.

Balchunas expressed uncertainty regarding the cause of the sudden increase, speculating in a subsequent X post that it might have been influenced by a recommendation from a Reddit or TikTok influencer, given the sharp and unexpected rise in trading activity.

On February 15, VanEck notified the United States Securities and Exchange Commission of its decision to reduce fees for its ETF from 0.25% to 0.20%, effective February 21.

This fee reduction places VanEck's fees 5 basis points below those charged by market leaders BlackRock and Fidelity.

BlackRock, the largest fund issuer, had previously committed to waiving fees on its iShares fund until it reached $5 billion in assets under management (AUM).

After reaching this milestone on February 15, BlackRock resumed charging 0.25% fees on all new investments into its fund.

Trading volumes for WisdomTree's Bitcoin Fund (WBTC) also experienced a significant surge, rising approximately 1,200% from the average to reach $154 million in total daily volume on February 20, according to Bloomberg data cited by Balchunas.

WBTC witnessed 23,000 individual trades on the same day, a substantial increase from the mere 221 trades observed on the preceding Friday.

The surge in trading volume for both the HODL and WBTC funds coincided with a period of heightened, albeit not excessive, volume on leading funds in the market, including BlackRock's iShares Bitcoin ETF.

As per data from Dune Analytics, VanEck's Bitcoin Trust currently ranks as the seventh-largest spot Bitcoin ETF, with $191.9 million in assets under management (AUM), while WisdomTree's fund holds the smallest AUM at $29.4 million.

Sources:

https://cointelegraph.com/news/vaneck-bitcoin-etf-trading-volume-jumps-1400-percent

https://twitter.com/EricBalchunas/status/1760060202156507487

https://www.sec.gov/Archives/edgar/data/1838028/000093041324000609/c108219_424b3.htm

https://twitter.com/EricBalchunas/status/1759990104339226806

https://twitter.com/EricBalchunas/status/1759985608989032736