VanEck Launches NODE ETF for 25% Crypto Exposure

VanEck has introduced the VanEck Onchain Economy ETF, or NODE, an exchange-traded fund designed to provide investors with access to the expanding digital asset economy without the need for direct cryptocurrency ownership. The fund, which is actively managed, focuses on public companies involved in the blockchain space, including crypto miners, exchanges, data centers, energy providers, and fintech firms utilizing crypto technology.

NODE will hold between 30 and 60 companies, selected from a broader pool of over 130, with the portfolio being adjusted based on market trends and each firm’s connection to Bitcoin. The fund will not hold cryptocurrencies directly but can invest up to 25% of its assets in crypto-linked exchange-traded products like Bitcoin ETFs. These investments will be made through a Cayman Islands subsidiary, allowing the fund to comply with U.S. tax laws while indirectly gaining exposure to cryptocurrency-related products.

Matthew Sigel, VanEck’s Head of Digital Assets Research, highlighted that NODE aims to offer diversification and liquidity while providing a lower-volatility alternative to pure-play crypto strategies. The fund’s strategy involves categorizing assets by their Bitcoin sensitivity, allowing for fine-tuning of the portfolio across different market cycles.

With a management fee of 0.69%, NODE complements VanEck’s existing line of crypto-related products, which includes the passively managed Digital Transformation ETF. The launch of NODE coincides with rising institutional interest in blockchain infrastructure and the increasing availability of products from traditional asset managers suited to the evolving on-chain economy.

VanEck has also filed for ETFs tied to individual digital assets, including Avalanche and Binance Coin, indicating its ongoing expansion in the crypto investment space. The NODE ETF is listed on the Cboe exchange and aims to provide diversified access to the digital asset ecosystem by considering investments in companies that have clearly communicated their intentions to engage in the blockchain space.

The NODE ETF is actively managed and will be rebalanced using crypto market cycle indicators, allowing the fund to adapt to the dynamic nature of the digital asset market. This approach provides investors with a more responsive investment vehicle. The ETF can allocate up to 25% of its assets to regulated digital asset instruments, such as exchange-traded products, further enhancing its exposure to the digital transformation sector.

The launch of the NODE ETF comes at a time of growing interest in blockchain technology and its potential applications across various industries. By targeting companies involved in the blockchain space, the ETF offers investors a way to gain exposure to this emerging technology without the risks associated with direct cryptocurrency ownership. This makes it an attractive option for investors looking to diversify their portfolios and capitalize on the growth potential of the digital asset ecosystem.

The NODE ETF's investment strategy is focused on companies that are actively engaged in the blockchain space, as evidenced by their product offerings, partnerships, and research and development activities. This approach ensures that the fund is invested in companies at the forefront of digital transformation, with a clear vision for leveraging blockchain technology to drive growth and innovation. By targeting these companies, the NODE ETF provides investors with a unique opportunity to gain exposure to the digital asset ecosystem and benefit from its long-term growth potential.