AI Infrastructure Rally Not a Bubble, Crypto Market Sluggishness due to Institutional Disappointment

The VanEck Onchain Economy ETF (NODE), managed by Matthew Sigel, has outperformed Bitcoin by nearly 100 percentage points over the past 15 months. This success is primarily due to an early bet on Bitcoin miners transitioning into AI data centers.

Sigel believes that the market was highly concentrated in the first five months of this year: companies spending the most on capital expenditures saw the best stock performance. However, this logic reversed after June, with software assets, including Bitcoin and crypto tokens, being sold off together, and capital expenditure itself becoming a penalized factor.

Sigel's stance can be summarized in two key judgments: First, AI infrastructure is not a bubble. Unlike the 19th-century railroad bubble, this cycle's funding comes from long-term leases in the private sector, rather than government land grants and speculative bonds.

The second judgment is that the real pressure in the crypto market isn't macroeconomic, but institutional disappointment with major L1s. Since the election, VanEck has reduced its positions in major L1s like Solana and ETH, shifting focus to enterprise chains like Circle, Stripe, and Robinhood.

Sigel believes that if the CLARITY Act passes and establishes a disclosure regime, affected tokens could experience significant relief rallies. However, until then, he will remain cautious.