On-Chain Investment Funds: Growth and Risks in Blockchain-Based Financial Products

Blockchain-based investment funds are surging, with assets nearly tripling from $11.1 billion to $30 billion in a year. Heavyweights like VanEck, Fidelity, BNP Paribas, and Apollo have entered the space, signaling institutional confidence. The technology promises lower costs, faster settlements, and novel investment vehicles—potentially reshaping finance.

Yet history warns against unchecked euphoria. The SPAC boom, non-traded REITs craze, and ICO wave all began with similar promises of democratization, often ending in investor losses. Blockchain’s transparency could mitigate risks, but the same infrastructure may also repackage flawed strategies under the banner of innovation.

Opportunism thrives where HYPE meets new distribution channels. As on-chain funds gain traction, scrutiny over fee structures and underlying assets will separate substantive advances from digital repackaging of old risks.