VanEck Onchain Economy ETF (NODE) set for May Launch
Amidst a landscape where financial advisors increasingly favor equity ETFs for crypto exposure – as indicated by the January Bitwise/VettaFi survey – and 10T Holdings founder Dan Tapiero’s emphasis on established corporate structures, VanEck introduces NODE, aiming to differentiate itself significantly.
Differentiating from Existing Crypto ETFs
Unlike VanEck’s own Digital Transformation ETF (DAPP) and the market-leading Amplify Transformational Data Sharing ETF (BLOK), the new NODE ETF targets a broader universe of more than 130 companies, representing a distinct strategic shift.
DAPP Structure and Focus
DAPP currently backs 20 holdings, with MicroStrategy (MSTR) dominating at nearly 11% of its assets. Combined with its select Bitcoin miner holdings, MSTR accounts for a clear majority of DAPP’s allocation.
However, while the massive gains driven by MSTR, VanEck Digital Assets Research Head Matthew Sigel cautions that many pure Bitcoin miners have historically underperformed across market cycles.
NODE’s Broader Scope and Mining Sector Reduction
Marketed with a May 14 launch date, NODE explicitly broadens its scope, downplaying volatility associated with the Bitcoin mining sector – characterized by bankruptcies and intense competition – that VanEck previously favored. Sigel described this diversification as a key strategy.
“…maybe long-term allocators would be more willing to hold this one over a multi-year horizon,” Sigel commented.
By reducing reliance on the volatile mining space, the fund appeals to investors seeking a longer-term holding period.
Focus on Downstream Opportunities
Sigel highlighted the opportunity in companies tangentially linked to Bitcoin mining. He specifically mentioned “downstream and midstream energy companies” supporting Bitcoin mining operations that offer different risk profiles than pure-play miners.
Furthermore, the ETF looks beyond Bitcoin’s hash rate: “There are a number of Web2 companies [globally] that have been more forward-thinking about adopting stablecoins and digital assets more broadly,” Sigel noted. “NODE is focused not only on the revenue opportunity directly [from crypto-related activities] but also on how crypto rails can improve many traditional companies’ cost structure.”
Crypto IPOs as Investment Targets
Sigel explicitly anticipates the wave of company listings expected within the cryptocurrency space, pointing to eToro, Circle, and others. The upcoming IPOs represent a significant target universe.
Commenting on the landscape, Sigel stated: “We count more than $10 billion of IPOs in the pipeline that should make for interesting hunting ground over the next year for active equity investors.”
