Key Takeaways:

• Discipline turns volatility into opportunity by grounding crypto investing in research, not speculation.
• Conviction builds when company fundamentals and onchain activity confirm the same trend.
• Active positioning across market cycles helps capture innovation while protecting against excess.

Active Management Starts with Discipline

In our previous post, we explored why active management matters in crypto, how adaptability helps investors navigate powerful cycles and shifting opportunities. But adaptability alone isn’t enough. True active management comes from discipline: applying structured research, judgment, and balance to every decision.

In the onchain economy, this means blending traditional financial analysis with blockchain-specific insights, knowing how to assess, adjust, and remain composed when conditions change.

1. Building the Investable Universe

Every active strategy begins with defining the opportunity set. In digital assets, that means identifying publicly traded companies meaningfully exposed to Bitcoin and the broader adoption of digital assets. This wide universe includes companies across every GICS sector, predominantly spanning fintech, e-commerce, energy infrastructure, and AI computing.

From thousands of global equities, we narrow the universe through three filters:

• Relevance: Companies must derive real revenue or strategic value from blockchain or digital assets.
• Scale and Strength: We focus on listed equities with meaningful size, liquidity, and sound balance sheets.
• Governance: Transparency and prudent financial management are essential; excessive leverage or weak oversight is screened out early.

This disciplined foundation identifies companies built for endurance from data-center operators powering AI workloads to fintechs integrating blockchain payments.

2. Combining Fundamental and Onchain Research

Traditional equity analysis still matters because cash flow growth, profitability, and competitive advantage form the backbone of long-term success. But active research goes further.

If research is like coaching a college football team, it’s about evaluating the play calls, execution, and game management, not just looking at the final score. A single flashy win doesn’t make a championship team, and one bad quarter doesn’t define a season. The same applies to digital asset companies. We care about consistency, execution, and how they perform under pressure.

Onchain metrics like transaction volumes or network fees provide real-time visibility into blockchain activity. Macro indicators like global liquidity, dollar strength, or policy shifts help us understand the playing field. And fundamental research reveals whether a company has a sustainable game plan.

Just as a coach desires to build a team with a solid run game, disciplined defense, and a quarterback who protects the football, we favor companies with reliable revenue, manageable leverage, and leadership we can trust. Those are the teams that may not always dominate the highlight reel but are most poised to endure and come away victorious.

When fundamentals, onchain data, and macro context align, conviction builds. When they diverge, it’s time to reassess the playbook.

3. Positioning Across Market Cycles

Crypto markets remain cyclical, with volatility often centered around Bitcoin’s halving cycle. For active managers, the goal isn’t to predict each turn but to position intelligently through them.

Bitcoin Expansion VS Contraction- Last 10 Calender Years

Source: Morningstar as of December 2024. Expansion: Periods beginning at a market trough and continuing until the next 10% decline. Expansions encompass recovery through the prior peak or a new all-time high. Contraction: Periods beginning at a market peak and continuing through the subsequent trough that includes a decline of 10% or more. References to Bitcoin market cycles are based on historical data and are provided for illustrative purposes only. Past performance is no guarantee of future results. Please see important disclosures at the end of the presentation.

Just as great coaches adjust the game plan depending on their opponent, active managers adapt exposure based on where we are in the market cycle.

• In expansion phases, exposure tilts toward higher-beta areas—miners and exchanges that thrive on liquidity and optimism.
• In downturns, companies with diversified revenue and durable balance sheets, such as semiconductor or infrastructure firms may get added exposure.

It’s about sticking to the game plan, protecting against turnovers, keeping it manageable on third down, and taking your shot when the opportunity arises. The process generally underweights leverage, avoiding companies or instruments reliant on borrowed exposure. That discipline helps reduce the impact of speculative excess that often defines crypto bull markets.

4. Continuous Monitoring and Risk Management

Markets, like seasons, shift quickly. Constant evaluation ensures the strategy stays disciplined even as conditions change.

Teams track earnings, governance, and onchain data alongside macro signals that influence sentiment. The goal is to spot subtle cracks before they widen, such as rising leverage, slowing network activity, or liquidity stress.

Sentiment indicators such as futures funding rates and Relative Unrealized Profit help identify overheated or oversold markets, offering cues to adjust before volatility spikes. When red flags emerge, exposure can be trimmed or exited, an option passive strategies lack. Meanwhile, new entrants are continuously assessed as innovation reshapes the opportunity set.

5. From Research to Real-World Impact

The payoff of this process is clarity. Decisions rest on measurable fundamentals and data-backed conviction, not momentum or hype. Active management provides a framework to participate in one of the most dynamic corners of global markets while maintaining a balance between opportunity and risk.

Much like a team that plays a complete game, successful active management means not being one-dimensional or careless with the football. It’s about preparation, adaptability, and execution across every phase of the market, putting investors in a position to win over the long run.

Lasting Advantage Comes from Discipline

Active management in the onchain economy is ultimately about discipline: integrating research, real-time data, and risk awareness to navigate an evolving market.

For investors seeking a structured, research-driven approach, VanEck’s Onchain Economy ETF (NODE) applies active management to companies leading the digital asset transition.

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