On May 14, VanEck is set to launch its groundbreaking exchange-traded fund (ETF) under the ticker NODE, marking a significant addition to its suite of crypto-related investment products. This move aims to provide investors with access to the burgeoning digital asset economy while avoiding the direct volatility associated with holding cryptocurrencies.
According to Matthew Sigel, the head of digital assets at VanEck, the U.S. Securities and Exchange Commission has given the green light for this new ETF. The NODE ETF seeks to create a diversified exposure profile by investing in a selection of publicly traded companies that are integral to the development of blockchain technology and digital assets.
Unlike traditional ETFs, NODE targets a specialized range of companies—approx. 30 to 60 out of a pool exceeding 130—operating across various sectors related to crypto infrastructure. This includes:
- Asset management firms
- Data centers
- Cryptocurrency exchanges
- Bitcoin mining companies
- Hardware manufacturers
The ETF will also allocate up to 25% of its holdings to crypto-related exchange-traded products but will not directly invest in cryptocurrencies. Instead, it focuses on what the SEC classifies as “Digital Transformation Companies,” which are generating revenue from blockchain, cryptocurrency, or distributed ledger technology. Furthermore, the ETF will incorporate investments in foreign securities, mid-cap stocks, and commodities-linked instruments.
To optimize investor exposure, VanEck plans to utilize a Cayman Islands subsidiary, which allows for indirect access to diverse commodity futures and swaps while remaining compliant with U.S. tax regulations. As a prudent measure, the fund will maintain restrictions on stablecoin investments and limit allocations to its subsidiary to 25% of total assets per quarter.
With the introduction of NODE, VanEck not only aims to expand its cryptocurrency offerings but also seeks to establish a new avenue for investors looking to diversify their portfolios without the complexities of direct crypto investments. The management fee for this ETF will be set at a competitive 0.69%, setting the stage for a new era of investment in digital assets.
VanEck’s robust move is expected to resonate well within the investment community, especially as it continues to pioneer in the cryptocurrency ETF space. The firm has already made headlines with its previous cryptocurrency-focused ETFs, including its successful spot Bitcoin ETF, HODL, which currently boasts over $1.2 billion in assets under management. Investors will undoubtedly be keen to see how the NODE ETF performs in the rapidly evolving digital landscape.
