VanEck Launches NODE ETF for 69% Fee, Offering Crypto Exposure

VanEck, a prominent global asset management firm, is set to introduce a new cryptocurrency-focused exchange-traded fund (ETF) under the ticker NODE on May 14. This ETF, known as the Onchain Economy ETF, is designed to offer investors exposure to the growing digital asset economy without the need to directly hold cryptocurrencies. The fund will provide diversified exposure to public companies that are actively involved in building blockchain-based infrastructure.

The NODE ETF will include 30 to 60 publicly traded companies from a pool of over 130, encompassing a wide range of industries linked to crypto infrastructure. These industries include asset managers, data centers, exchanges, Bitcoin miners, and hardware manufacturers. The ETF may also allocate up to 25% of its holdings to crypto-linked exchange-traded products. Notably, the fund will not invest directly in cryptocurrencies but will target "Digital Transformation Companies," which are firms generating revenue from blockchain, crypto, or distributed ledger technology. These companies may also include foreign securities, mid-cap stocks, and commodities-linked instruments.

To enhance its exposure, the NODE ETF will invest through a Cayman Islands subsidiary, allowing indirect access to commodity futures, swaps, and other vehicles while complying with U.S. tax regulations. The fund will exclude stablecoins and limit investments in the subsidiary to 25% of its total assets per quarter. The management fee for the ETF is set at 0.69%.

VanEck's head of digital assets, Matthew Sigel, announced the approval of the ETF by the U.S. Securities and Exchange Commission in an April 16 post. This launch is part of VanEck's broader strategy to expand its selection of cryptocurrency ETFs. The firm has previously applied for other cryptocurrency-focused ETFs, including those tracking Avalanche (AVAX) and Binance Coin (BNB). Additionally, VanEck's spot Bitcoin (BTC) ETF, HODL, currently manages over $1.2 billion in assets.

The NODE ETF presents a significant opportunity for investors seeking exposure to the dynamic crypto industry. By investing in companies that are shaping the digital asset and blockchain economy, the ETF offers a bridge for investors to access this growing sector without the complexities of directly holding cryptocurrencies. This move by VanEck underscores the increasing interest and investment in the cryptocurrency space, as more traditional financial institutions seek to capitalize on the potential of digital assets.

As a growing amount of crypto-related stocks start trading on the market, with several companies looking to go public this year, investors are increasingly wanting exposure to crypto-related stocks. A survey among financial advisors at an ETF conference in March found that crypto equity ETFs are at the forefront of what advisors are interested in investing. This trend highlights the growing demand for investment products that provide exposure to the crypto industry without the need for direct cryptocurrency ownership.