“This kind of reinforces our view that you stay away from leverage in this still immature asset class.” – 01:49
Matt Siegel, Portfolio Manager of the VanEck On-Chain Economy ETF, joins Remy Blaire to discuss the crypto market, which is grappling with its worst liquidation event in history. Over $19 billion in positions were liquidated following the announcement of additional 100% tariffs on China by former President Trump. The episode begins with a discussion of Bitcoin’s dramatic price fluctuations, as it traded above $121,000 before briefly falling below $105,000, only to reclaim $115,000 by Sunday evening.
Together, they analyze the implications of the liquidation event, with Matt emphasizing the risks associated with leverage in the still-maturing crypto ecosystem. He points out that specific issues with Binance’s matching engine may have contributed to the chaos, reinforcing the idea that investors should avoid leveraged positions in this volatile asset class.
The conversation shifts to the intersection of Bitcoin mining and artificial intelligence (AI). Matt explains how many Bitcoin miners are diversifying their business models by repurposing data centers to meet the growing demand for AI and high-performance computing. This strategic pivot has led to partnerships with major hyperscalers like Amazon Web Services and Microsoft Azure, which in turn lowers their cost of capital and boosts stock prices. Matt notes that approximately 25% of the NODE portfolio is exposed to this promising trend.
As they discuss the NODE ETF, Matt elaborates on its focus on providing diversified exposure to both leading cryptocurrencies and equities that are capitalizing on the adoption of digital assets. He addresses concerns regarding the volatility of the crypto market, asserting that NODE has outperformed Bitcoin while maintaining a more attractive volatility profile due to its diversified approach.