Latest news: the Bitcoin ETF managed by VanEck, identified by the symbol HODL, has shown a significant increase in daily volume, exceeding 300 million dollars.
This figure represents an increase of over 1000% compared to the previously recorded peak activity day.
Contrary to the hypothesis of a significant institutional investment as the main catalyst for this increase, the increase has been attributed to “32,000 individual transactions,” as reported by the senior Bloomberg analyst specializing in ETFs.
Let’s see below all the details.
Summary
Positive news for the trading volume on VanEck’s Bitcoin ETF
As anticipated, in less than a week from the announcement by VanEck regarding the reduction of fees on its spot ETF on Bitcoin, the fund managed by the company experienced a significant spike in trading volume.
Last Tuesday, VanEck’s spot ETF on Bitcoin exceeded 300 million dollars in trading volume, recording more than ten times the previous maximum volume recorded in a single day.
At the time of the launch of the ETF based on cryptocurrencies on January 11, the highest daily volume recorded was $25.5 million, according to Yahoo Finance data collected by The Block.
The senior ETF analyst at Bloomberg, Eric Balchunas, expressed his amazement at the fund’s performance, stating that VanEck’s ETF “is experiencing a surge today with a volume of 258 million dollars, an increase of 14 times compared to its daily average.”
This happened not because of a large investor, as might have been expected, but rather thanks to 32,000 individual transactions, representing a 60-fold increase compared to the average.
VanEck’s ETF has so far struggled to compete with products offered by BlackRock, Fidelity, and Grayscale, which have dominated in terms of daily trading volumes since the introduction of the new financial instruments last month.
Although BlackRock and Fidelity charge a fee of 0.25% on their offerings, with the possibility of partial discounts for early investors, VanEck has tried to compete on price by announcing a reduction in its fee to 0.20%.
This starting from February 21, as stated in its recent communication to the Securities and Exchange Commission.
The SEC fines VanEck $1.75 million
Recently, VanEck has signed an agreement with the Securities and Exchange Commission (SEC) of the United States.
Specifically, the company has agreed to pay a civil penalty of $1.75 million to settle charges of failure to disclose the involvement of a social media influencer in the launch of its Social Sentiment ETF.
The SEC announcement states that VanEck launched the VanEck Social Sentiment ETF (BUZZ) in March 2021. The ETF was designed to replicate an index based on “positive insights” from social media and other data sources.
The index provider had informed VanEck Associates of its intention to involve a “well-known and controversial” social media influencer to promote the index during the ETF launch.
Nevertheless, the SEC order revealed the opposite.
This means that the asset manager did not disclose this planned involvement nor the structure of the scalable fees to the ETF board during the approval request for the launch of the fund and the management commission.
The lack of disclosure, according to the SEC, has limited the board’s ability to assess the economic impact of the licensing agreement and the influencer’s participation, thus hindering the decision-making process.
Andrew Dean, co-head of the asset management unit of the SEC’s Enforcement Division, emphasized the importance of accurate information from consultants.
Especially in matters that can affect consulting contracts. The SEC found that VanEck’s failure to disclose violated the Investment Company Act and the Investment Advisers Act.
Without admitting or denying the SEC’s allegations, the Bitcoin ETF issuer has agreed to the imposition of a civil penalty, a cease-and-desist order.
Furthermore, it will implement preventive measures to avoid similar disclosure failures.
