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

Assets in blockchain-based investment funds have surged from $11.1 billion to nearly $30 billion in just one year, signaling rapid institutional adoption. Traditional finance giants like VanEck, Fidelity, BNP Paribas, and Apollo are now entering the space with on-chain fund offerings.

While blockchain technology promises lower costs, greater transparency, and novel investment vehicles, history warns of pitfalls. The SPAC boom, non-traded REITs craze, and ICO wave all followed similar trajectories—initial enthusiasm followed by investor losses when HYPE outpaced substance.

The critical question isn't whether blockchain can improve financial products, but how the technology will be implemented. Past cycles show new distribution channels often attract opportunists repackaging risky strategies under the banner of innovation. As these funds gain mainstream traction, fee structures and underlying asset quality will determine whether they deliver real value or become digital-era cautionary tales.