Summary Active management helps investors navigate crypto’s boom-and-bust cycles by adjusting exposure as conditions change. Active strategies can capture growth dynamics across miners, fintechs, and infrastructure—not just tokens. Research-driven oversight aims to screen out weak players and seeks to avoid costly failures. Originally published on September 18, 2025 With shifting cycles, emerging opportunities, and rapid innovation, crypto is a market where adaptability matters. Active management provides the flexibility to harness upside potential while avoiding the pitfalls that passive strategies must endure. Introduction Crypto is one of the fastest-moving areas of global markets. Entire sectors can rise or fall within months, and the winners of one cycle often fade into obscurity by the next. For investors, this raises an important question: is simply buying and holding enough, or does crypto demand a more active approach? Here are three reasons why active management can make a meaningful difference in digital assets. 1. The Cycle Challenge * Crypto markets are cyclical, often moving in four-year waves tied to Bitcoin’s halving events. During bull runs, digital asset prices and related equities can soar, while bear markets bring steep corrections. Bitcoin ( BTC-USD ) has experienced peak-to-trough drawdowns of 70% or more in past cycles, pulling down miners, exchanges, and related equities with it. Source: Morningstar. Q3 2025. Data included in chart refers to S&P 500 Total Return Index (S&P 500 TR). 60/40 Portfolio is 60% S&P 500 TR and 40% Bloomberg U.S. Aggregate Bond Index. Bitcoin data refers to Bloomberg Bitcoin Index. Please see important disclosures and index definitions at the end of this content. Past performance and references to Bitcoin market cycles are based on historical data, neither of which guarantee future results. This chart makes clear that timing and adaptability matter: historically, while the volatility is extreme, so have been the recoveries. Even with those steep declines, Bitcoin’s historical long-term performance remains among the strongest of any asset class. The key question for investors is whether active management can help keep the upside while dialing down the pain of the downside. An active approach allows investors to adjust exposure as these cycles unfold rather than simply riding them up and down. This could mean leaning into higher-growth opportunities when conditions are favorable and becoming more cautious when signs of stress appear. The flexibility to make those shifts is one of the clearest advantages of active management in crypto. 2. Beyond Just Tokens The onchain economy is broader than just cryptocurrencies. It includes miners powering both Bitcoin and AI data centers, fintech firms enabling digital payments, exchanges providing liquidity, and even energy infrastructure companies that keep this digital ecosystem running. These are businesses with revenues, cash flows, and real customers—not just speculative tokens. One way to see this trend: companies are increasingly talking about blockchain in their regulatory disclosures. Mentions of terms related to digital assets in SEC filings climbed this past year, hitting their highest point last month. That steady rise suggests that adoption is moving beyond crypto-native firms and into a much wider range of industries. Blockchain-related Mentions in SEC Filings Source: SEC Edgar Database. The Block. As of 9/9/25. Not intended as a recommendation to buy or sell any securities referenced herein or as any call to action. Active management allows rotation between these categories to balance risk and reward. For example, during the AI boom of 2024, several Bitcoin miners repurposed data centers to service high-performance computing demand—creating growth opportunities outside of pure crypto cycles. Similarly, fintech leaders in Latin America and Asia have integrated crypto wallets into their payments platforms, broadening adoption and revenue streams. These types of cross-sector opportunities highlight how diversified companies can benefit investors in ways that passive indexes tied strictly to tokens cannot. 3. Filtering Risks & Avoiding the Duds Not every company or token in the digital asset space is built to last. Some carry excessive leverage, weak governance, or business models tied to hype cycles. The past few years alone saw high-profile failures of both private and publicly traded firms that grew too aggressively and collapsed when liquidity dried up. Active management brings research discipline—screening out fragile players while identifying firms with sustainable revenues, strong balance sheets, and strategic positioning in the onchain economy. Think of it as spotting cracks in a foundation: if you see them early enough, you can step aside before the building comes down. Passive strategies, on the other hand, are stuck holding everything in the index—even as it falls apart. The public markets offer cautionary examples. Silvergate Capital ( SICPQ ), once trading above $200 a share, saw an 89% drawdown in late 2022 before announcing liquidation in March 2023 and filing for bankruptcy in 2024. Signature Bank ( SBNY ), which peaked near $375 in early 2022, was seized by regulators in March 2023 after a deposit run, with shares now worth pennies on OTC markets. And Voyager Digital ( VYGVQ ), a Canadian-listed crypto broker, lost over 99% of its value following exposure to Three Arrows Capital and filed for bankruptcy in July 2022. In each case, red flags like concentrated crypto deposits, weak liquidity, or risky lending appeared before the final collapse—warning signs that active managers could have acted on well before passive strategies were forced to ride them down. Silvergate Capital: From Growth to Voluntary Liquidation Signature Bank: Regulatory Seizure Following Crypto Deposit Outflows Voyager Digital: Bankruptcy Following Risky Lending and Crypto Exposures Sources: Vested Finance, The Block, Morningstar. Past performance is no guarantee of future results. Not intended as a recommendation to buy or sell any securities referenced herein or as any call to action. This ability to separate signals from noise is especially valuable in crypto, where the pace of innovation is matched by the frequency of failed experiments. Active oversight also enables selective use of tools like exchange-traded products or futures, adding tactical exposure during favorable environments and reducing it when conditions deteriorate—an advantage that passive strategies lack. Conclusion For investors, we believe the case for active management in crypto is clear: it provides the ability to adapt to cycles, diversify beyond tokens, and filter for quality. Taken together, these advantages can help navigate one of the most dynamic corners of today’s markets. For those looking for a practical way to access this approach, VanEck’s Onchain Economy ETF ( NODE ) is one option designed to bring active management into the digital asset space. Important Disclosures * References to Bitcoin market cycles are based on historical data which does not guarantee future results. This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees. The Fund may invest nearly all of its net assets in either Digital Transformation Companies and/or Digital Asset Instruments. The Fund does not invest in digital assets or commodities directly. Index Definitions: S&P 500 Total Return Index (S&P 500 TR) is an index that tracks the performance of the 500 largest publicly traded U.S. companies and includes both price appreciation and reinvested dividends, providing a comprehensive measure of U.S. large-cap equity performance. Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that tracks the performance of the U.S. investment-grade bond market, including Treasuries, mortgage-backed securities, and corporate bonds. Bloomberg Bitcoin Index is an index that measures the performance of Bitcoin based on reliable pricing sources and is designed to serve as a benchmark for institutional products referencing Bitcoin’s spot market performance. An investment in the Fund involves a substantial degree of risk and is not suitable for all investors. Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s Shares and the possibility of significant losses. An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Therefore, you should consider carefully various risks before investing in the Fund, each of which could significantly and adversely affect the value of an investment in the Fund. An investment in the Fund may be subject to risks which include, among others, risks related to investing in digital transformation companies, digital asset instruments, commodities and commodity-linked instruments, subsidiary investment, commodity regulatory (with respect to investments in the subsidiary), tax (with respect to investments in the subsidiary), gap, liquidity, derivatives, new fund, regulatory, non-diversified, small- and medium-capitalization companies, foreign securities, emerging market issuers, market, operational, active management, authorized participant concentration, no guarantee of active trading market, trading issues, fund shares trading, premium/discount risk and liquidity of fund shares, industry concentration, cash transactions, underlying investment vehicle, and affiliated investment vehicle risks, all of which may adversely affect the fund. Emerging market issuers and foreign securities may be subject to securities markets, political and economic, investment and repatriation restrictions, different rules and regulations, less publicly available financial information, foreign currency and exchange rates, operational and settlement, and corporate and securities laws risks. Small- and medium-capitalization companies may be subject to elevated risks. Digital asset instruments may be subject to risks associated with investing in digital asset exchange-traded products (“ETPs”), which include the historical extreme volatility of the digital asset and cryptocurrency market, as well as less regulation and thus fewer investor protections, as these ETPs are not investment companies registered under the Investment Company Act of 1940 (“1940 Act”) or commodity pools for the purposes of the Commodity Exchange Act (“CEA”). The technology relating to digital assets, including blockchain, is new and developing and the risks associated with digital assets may not fully emerge until the technology is widely used. Digital asset technologies are used by companies to optimize their business practices, whether by using the technology within their business or operating business lines involved in the operation of the technology. The cryptographic keys necessary to transact a digital asset may be subject to theft, loss, or destruction, which could adversely affect a company’s business or operations if it were dependent on the digital asset. There may be risks posed by the lack of regulation for digital assets and any future regulatory developments could affect the viability and expansion of the use of digital assets. Commodities and commodity-linked instruments may be subject to further risks, including tax and futures contracts risk. This risk may be adversely affected by “negative roll yields” in “contango” markets. The Fund will “roll” out of one futures contract as the expiration date approaches and into another futures contract with a later expiration date. The “rolling” feature creates the potential for a significant negative effect on the Fund’s performance that is independent of the performance of the spot prices of the underlying commodity. The “spot price” of a commodity is the price of that commodity for immediate delivery, as opposed to a futures price, which represents the price for delivery on a specified date in the future. The Fund would be expected to experience negative roll yield if the futures prices tend to be greater than the spot price. A market where futures prices are generally greater than spot prices is referred to as a “contango” market. Therefore, if the futures market for a given commodity is in contango, then the value of a futures contract on that commodity would tend to decline over time (assuming the spot price remains unchanged), because the higher futures price would fall as it converges to the lower spot price by expiration. Extended period of contango may cause significant and sustained losses. Additionally, because of the frequency with which the Fund may roll futures contracts, the impact of contango on Fund performance may be greater than it would have been if the Fund rolled futures contracts less frequently. Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 800.826.2333 or visit vaneck.com . Please read the prospectus and summary prospectus carefully before investing. © Van Eck Securities Corporation, Distributor, a wholly-owned subsidiary of Van Eck Associates Corporation. Original Post
