NODE's July 2026 Performance: A Tale of Two Markets
In July 2026, the VanEck Onchain Economy ETF (NODE) experienced a -13.5% decline, as bitcoin miners and AI-infrastructure equities faced a sell-off driven by rising long-end rates and AI-financing strains. Meanwhile, spot cryptocurrencies moved in the opposite direction, with bitcoin up 7.3% and ethereum up 18.2%. This divergence between tokens and equities was stark, highlighting the unique risk profile of crypto-related stocks.
Why Did NODE Fall?
The primary drivers of NODE's decline were macroeconomic factors affecting high-beta tech and crypto-exposed equities. Rising long-term interest rates pressured valuations, while concerns about AI infrastructure financing led to a broader sell-off in that sector. As a result, the fund's holdings in miners like TeraWulf (WULF) and IREN, as well as AI-focused companies like Applied Digital (APLD), suffered significant losses.
NODE vs. Bitcoin: A Cumulative Lead
Despite the monthly underperformance, NODE has maintained a cumulative lead over bitcoin exceeding 80 percentage points since its inception in May 2025. However, it's important to note that NODE does not hold bitcoin or ether directly; it invests in equities and digital-asset ETPs, offering a different risk-return profile. A direct comparison to a single crypto asset is not appropriate.
High Volatility: The Nature of the Beast
Crypto mining and AI-infrastructure stocks are known for their high beta to both crypto prices and interest rate expectations. In July, NODE exhibited 68.9% annualized volatility and an 18.3% peak-to-trough drawdown, with only 9 of 22 trading days ending positive. This volatility is a key consideration for investors, who must be prepared for significant price swings.
Our Response: Adding to Conviction
Despite the sell-off, we chose to add to our conviction names rather than de-risk. This decision was based on our belief that the fundamental drivers of the onchain economy and AI infrastructure remain intact. We view the July decline as a market correction rather than a structural change, and we are confident in the long-term growth prospects of our holdings.
Portfolio Positioning and Key Holdings
As of July 31, 2026, NODE's top holdings included spot bitcoin ETP (10.50%), TeraWulf (6.05%), IREN (4.62%), Figure Technology Solutions (4.11%), and Applied Digital (3.84%). We also exited our position in Sea Ltd (SE) during the month. These weightings reflect our strategic focus on companies that are poised to benefit from the convergence of crypto and AI.
Looking Ahead: Staying the Course
We remain committed to our investment approach, which emphasizes long-term value creation in the onchain economy. While short-term volatility is inevitable, we believe that the companies in our portfolio are well-positioned to capitalize on the growing adoption of digital assets and AI technologies. We will continue to monitor market conditions and adjust our holdings as necessary to maximize returns for our investors.
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