- The VanEck Bitcoin Trust (HODL) experienced an absurd 14x increase in trading volume…with no clear explanation.
- Unlike typical whale activity, the volume came from 32K individual trades, suggesting retail involvement.
- Analysts doubt the surge in volume is due to investors selling BTC’s slight drop, leaving them confused about what’s going on in the markets.
The crypto industry is no stranger to weirdness and mysteries. The market is full of strange phenomena, where a token that claims to be “revolutionising the industry” suddenly disappears into the night. But even the most battle-hardened Bigfoot believers are having a tough time explaining the strange events that hit the crypto ETF markets yesterday, as trading volumes went absolutely haywire. So what’s actually going on, and is there a rational explanation – or is it yet another enigma we must chalk up to the supernatural?
HODL Sees Whopping 14X Increase in Trading
The aptly named HODL is VanEck’s entry in the Bitcoin ETF raffle, officially titled the VanEck Bitcoin Trust. The fund hasn’t been the most popular since it started trading on the 11th of January, falling behind the two biggest institutions (BlackRock and Fidelity) which were previously dominating trading inflows.
However, all of this changed last night, when for no apparent reason, the amount of money flowing in and out of HODL increased by 1,400%. Even more impressively, the surge wasn’t on the back of one individual whale entering/leaving their position. Rather, the sky-rocketing volume came on the back of 32,000 individual trades, which is 60x more than its daily average.
Some have speculated that Bitcoin’s slight correction since hitting USD $50K (AUD $78K) scared off institutional investors, who then sold their holdings in HODL (ironic, right?). However, as Eric Balchunas points out, this doesn’t make sense for several reasons.
To the ‘bruh volume must be selling bc btc is dumping’ crowd: a) that makes no sense given how little these ETFs had in existing aum/shareholders b) plus you never you see ton of outflows in brand new ETF that is in rally mode c) there are so many other holders of btc besides…
— Eric Balchunas (@EricBalchunas) February 20, 2024
But even Balchunas, who is a senior analyst at Bloomberg and the leading expert on crypto ETFs, was completely stumped when trying to figure out why HODL became such hot property yesterday.
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. https://t.co/WazxSSgFjR
— Eric Balchunas (@EricBalchunas) February 20, 2024
While it’s possible one of the theories he floated ends up being true, I’d rather believe it was simply another case of the unexplainable…
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