VanEck Submits Application for Exchange-Traded Fund Focused on Blockchain Technology Economy
In a significant move, investment firm VanEck has announced the launch of an exchange-traded fund (ETF) called the Onchain Economy ETF (NODE). This new financial product comes a few months after the company shut down its EFUT product, which was based on Ethereum futures.
The Onchain Economy ETF is designed to invest in companies that are part of the blockchain and on-chain economy ecosystem, rather than directly in cryptocurrencies. The ETF's holdings will primarily consist of companies involved in crypto exchanges, mining firms, technology companies, and other entities contributing to or benefiting from blockchain technology or the broader digital economy.
Notable companies that may be included in the NODE ETF's portfolio are Coinbase Global Inc, Robinhood Markets Inc, Galaxy Digital Holdings Ltd, Core Scientific, MercadoLibre, MicroStrategy, Marathon Digital Holdings, Cipher Mining, Iris Energy, and Shopify.
In contrast, Ethereum-based ETFs like BlackRock's iShares Ethereum Trust ETF and Grayscale Ethereum Trust ETF primarily focus on direct exposure to the Ethereum cryptocurrency itself. These ETFs invest mostly in Ethereum tokens (ETH), aiming to track the price of Ethereum, rather than investing in companies within the blockchain or crypto infrastructure ecosystem.
Key differences between the VanEck NODE ETF and Ethereum-tracking ETFs are:
| Aspect | VanEck Onchain Economy ETF (NODE) | BlackRock iShares Ethereum Trust ETF & Grayscale Ethereum Trust ETF | |-----------------------------|---------------------------------------------------------------------|------------------------------------------------------------------------------| | Investment Focus | Companies participating in the on-chain/blockchain economy | Direct holdings of Ethereum cryptocurrency (ETH) | | Holdings | Crypto exchanges, mining companies, technology companies, etc. | Ethereum tokens | | Exposure Type | Equity exposure to blockchain-related companies | Cryptocurrency exposure | | Expense Ratio (VanEck NODE) | About 0.69% | Typically varies, but Grayscale’s Ethereum Trust has had higher fees typically |
The VanEck NODE ETF provides indirect exposure to the crypto sector through equities, offering potentially less volatility and different risk characteristics compared to Ethereum-tracking ETFs, which provide direct exposure to the price movements of Ethereum tokens.
As of now, BlackRock's iShares Ethereum Trust ETF (ETHA) and the Grayscale Ethereum Trust ETF (ETHE) are the dominant players in the segment of spot ETFs tied to Ether. The Onchain Economy ETF also aims to invest in investment products tied to virtual assets, such as futures contracts.
This makes the NODE ETF distinct in strategy, as it targets the broader blockchain economy's corporate ecosystem rather than just the Ethereum cryptocurrency.
Sentence 1: The Onchain Economy ETF, launched by investment firm VanEck, aims to invest in companies involved in crypto exchanges, mining firms, technology companies, and other entities contributing to or benefiting from blockchain technology or the digital economy, rather than directly investing in Ethereum or other cryptocurrencies.
Sentence 2: Unlike Ethereum-based ETFs like BlackRock's iShares Ethereum Trust ETF and Grayscale Ethereum Trust ETF, the VanEck NODE ETF provides indirect exposure to the crypto sector through equities, offering potentially less volatility and different risk characteristics due to its focus on the broader blockchain economy's corporate ecosystem, rather than just the Ethereum cryptocurrency.
