Blockchain Fund Assets Triple to $30 Billion, Investors Cautioned
Blockchain-issued investment funds have surged from $11.1 billion to nearly $30 billion, with major firms like VanEck, Fidelity, BNP Paribas, and Apollo launching on-chain products. Despite the promise of blockchain reducing costs and increasing efficiency, risks remain similar to past financial manias.
- Historical events like SPAC booms and crypto ICOs highlight risks when new distribution methods meet hype.
- Blockchain could lower costs and improve transparency but may also recycle failed strategies with high fees.
- Investors should critically evaluate fee structures; tokenized funds can be more expensive than traditional equivalents.
- Products should offer genuine benefits, not merely rebrand existing ones without improvements.
- Watch for cost compression and involvement from trusted institutions like Moody’s integrating ratings into tokenized securities.
SEC Chair Paul Atkins emphasizes using blockchain for financial efficiency while maintaining investor protections. Vigilance is crucial as digital markets evolve, requiring scrutiny of fund details and participation from neutral entities to ensure trust and transparency.