Node Capital has launched its first liquid fund to invest in listed tokens, viewing the current bear market as an optimal time for such investments. The fund is structured as an open-ended vehicle, accepting new capital quarterly, and targets specific investors due to regulatory constraints. Despite market volatility and a significant drop in Bitcoin and total crypto market cap, Node Capital sees potential in liquid tokens, which are considered pre-ETF assets. The firm, founded in 2021, manages $50 million in assets and has developed proprietary risk management tools to navigate the market. Node Capital also operates Node Monster, Node Security, and Node Link, expanding its services in the crypto space.

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Crypto venture firm Node Capital has launched a liquid fund to invest in listed tokens, betting that bearish market conditions offer the best entry point."We see a great opportunity in the market for liquid tokens when you look at current valuations as compared to early-stage pre-launched projects," Amos Meiri, founding partner at Node Capital, told The Block. "Bear market is the best time to invest in liquid tokens that are what we call today 'pre-ETF [pre-exchange traded fund assets].'"This is Node Capital's first liquid fund and it is structured as an open-ended vehicle — meaning it accepts new capital on a quarterly basis. "We are actively fundraising," Meiri said. "This is a private fund and we can onboard only specific types of investors based on regulations," he added, declining to disclose further details.The launch comes amid heightened volatility in crypto markets, fueled by shifting investor sentiment and macroeconomic headwinds such as U.S. tariffs. Bitcoin has dropped over 15% year-to-date to around $79,000, while the total crypto market cap has fallen over 25% to $2.6 trillion. The downturn, Meiri argues, is the right time to double down on liquid tokens.Liquid crypto funds generally invest in already listed tokens and typically deploy more active strategies aimed at near-to-mid-term returns. This contrasts with traditional venture funds that back early-stage startups with longer investment horizons. Hybrid funds, on the other hand, combine both strategies.Founded in 2021, Node Capital began with a hybrid fund, later raising a second venture fund, and now adds its new liquid strategy. The firm currently manages $50 million in assets. Its second venture fund raised $20 million, Meiri said, while declining to disclose total fundraising across all its vehicles.Node Capital's portfolio includes notable projects like Ether.fi, Fhenix and Axelar.Meiri did not name the firm's limited partners but said they include crypto founders from leading Layer 1 blockchain projects and general partners from both crypto-native and traditional venture firms.To navigate volatile markets, Node Capital has developed proprietary risk management tools, Meiri said. "Important to say that we are not traders but investors and looking into longer holding periods of two to five years," he noted."We look at projects that have clear discrepancies when comparing their runway, growth, onchain data and valuations," Meiri said. "Most of it currently is around infrastructure and dapps [decentralized applications]."Beyond Node Capital, the team also operates three additional units: Node Monster, Node Security and Node Link.Node Monster, launched in 2023, is the group's validator arm. It recently surpassed $1 billion in assets under management across more than 20 blockchain networks, making it one of the largest Ethereum validators, according to Node Capital.Node Security, launched this year, provides services such as security audits, vulnerability assessments and incident response. Node Link, also launched this year, supports Node Capital's portfolio companies and partners through community growth and similar initiatives to drive engagement.The Funding newsletter:Stay updated on the latest crypto funding news and trends with my free bimonthly newsletter, The Funding. Sign uphere!

Node Capital Launches First Liquid Token Fund During Bear Market