The crypto market witnessed another frenzy this Tuesday, as trading volumes for the VanEck Bitcoin ETF (HODL) jumped over 2,200% in a single day. Propelling HODL to the third most traded ETF, behind Grayscale’s GBTC and BlackRock’s IBIT.
Massive Influx of Retail Traders Drives Volume Explosion
According to the data, HODL traded more than $400 million in volume on Tuesday, 22 times its usual average daily volume of $17 million. This sudden surge appears to have been fueled by an army of small retail traders, rather than a large institutional investor.
While the exact source remains unknown, it appears that a popular crypto influencer may have promoted HODL to his fan base, sparking a rush to the Bitcoin ETF. It would not be the first time that such a buying frenzy has been triggered on social networks.
VanEck Fee Reduction Fuels Trader Interest
This massive influx of volume comes just before VanEck is reducing its fees on HODL, going from 0.25% to 0.20% starting this Wednesday. This drop in costs has likely increased retail traders’ interest in the Bitcoin ETF.
The combination of a viral recommendation and a fee reduction appears to have created the perfect storm to spark a buying frenzy. Small crypto traders rushed to buy HODL shares before the reduced fees took effect.
This surge in volume has propelled Bitcoin ETFs as a whole to their highest level of daily trading since their launch in January.
The Bitcoin craze is back
This episode is strangely reminiscent of the bull run frenzy of 2017, when Bitcoin reached its all-time high of nearly $20,000. Although prices are currently far from these highs, the speculative craze around Bitcoin appears to be back.
If this explosive interest in Bitcoin ETFs continues, it could signal the start of a new bull run. More and more individual investors are attracted by the rapid enrichment potential of this crypto.
It remains to be seen whether this sudden surge in HODL volumes is just an isolated flash in the pan, or a precursor to mass adoption of Bitcoin. For now, the crypto market is holding its breath.
This mysterious surge in volumes on VanEck’s Bitcoin ETF illustrates how susceptible the Bitcoin market remains to speculation and crowd effects. Is all it takes is a viral recommendation and a fee reduction to spark a crypto buying frenzy?
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