NODE ETF Drops 13.5% in July as AI Stocks Tumble

VanEck’s Onchain Economy ETF (NODE) plunged 13.5% in July 2026, hit hard by a selloff in AI-infrastructure equities and bitcoin mining stocks. This sharp decline came as broader AI-related markets reeled under rising interest rates and investor concerns over stretched valuations, while bitcoin and ethereum rallied 7.3% and 18.2%, respectively, during the same period.

The fund’s performance highlights a striking divergence between crypto tokens and equities tied to the digital and AI economy. NODE, which does not directly hold cryptocurrencies, saw its equity-heavy portfolio exposed to high-beta sectors, including data-center operators and bitcoin miners. Among its top holdings as of July 31, 2026, were a spot bitcoin ETP (10.5%), TeraWulf (6.05%), and Applied Digital (3.84%). Sea Ltd was fully exited during the month, reflecting portfolio adjustments amid market turmoil.

AI-Infrastructure Selloff Weighs on Equities

The broader AI trade faced significant pressure in July, extending losses from earlier in the year. On July 23, Alphabet and Tesla alone lost a combined $500 billion in market value as investors questioned the pace of returns from AI infrastructure spending. Rising financing costs and concerns over data-center construction risks added to the selloff, which wiped out $500 billion in a single session. By July’s end, data-center stocks tied to AI were struggling with growing skepticism over their capital-intensity and credit risk profiles.

NODE’s portfolio was particularly exposed to this trend, given its focus on equities that intersect digital assets and AI infrastructure. High-beta stocks like TeraWulf and Riot Platforms contributed to the fund’s 68.9% annualized volatility in July, with only 9 of 22 trading days delivering positive results.

Crypto Gains Fail to Offset Equity Losses

While NODE fell, the underlying crypto market told a different story. Bitcoin and ethereum surged, driven partly by optimism over potential spot ETF approvals and investor rotation into digital assets. However, NODE’s indirect exposure through ETPs (10.5% and 1.04% allocations to bitcoin and ethereum, respectively) wasn’t enough to offset the steep losses in its equity holdings.

Still, since its May 2025 inception, NODE retains a cumulative performance lead of over 80 percentage points against bitcoin. The fund’s strategy, which targets equities and asset-linked ETPs rather than holding tokens directly, creates a fundamentally different risk-return profile compared to cryptocurrencies.

Broader Implications for Investors

July’s performance underscores the risks of equity exposure in sectors with high sensitivity to interest rates and speculative growth narratives. Rising long-end rates disproportionately impacted stocks tied to capital-intensive AI projects, and NODE’s holdings mirrored this dynamic. For crypto-focused investors, the divergence between token prices and equity performance is a reminder of the complexities in blending these asset classes.

Looking ahead, the AI-infrastructure buildout remains a structural trend, with major tech firms projected to spend over $745 billion in 2026 alone. While near-term volatility is likely, the sector’s long-term prospects hinge on resolving financing and operational challenges. For NODE investors, the question remains whether the fund’s focus on “conviction names” will bear fruit amidst such heightened uncertainty.

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