Updated: Sep 8
A blockchain fund is pretty much similar to standard sectors or stock investments. The biggest and most significant difference between other stock-based funds and blockchain funds is that they are targeted to invest in a basket of blockchain-based firms.
The assets owned in a blockchain fund can have multiple business operations in blockchain technology or develop the technology themselves.
Let's discuss them in detail below to give you a better idea of blockchain funds.
Understanding Blockchain Funds
Blockchain is an advanced technology that involves a ledger that records all information regarding a transaction along with its other details like date, time, amount, etc.
This blockchain ledger is decentralized, meaning it is not stored at any specific or single location, but rather the ledger is distributed across a network that all members can access and view. The information recorded in the ledger is also encrypted and incorruptible.
Blockchain funds provide users dual benefits. These are pretty much similar to pooled investments or mutual funds, and you can trade on a real-time basis like stock trading.
Example of a Blockchain Fund
Investors can invest in blockchain funds that are managed either actively or passively. Plus, the fund covers a plethora of different use cases of blockchain technology, from currencies to autonomous market makers to oracle networks.
Although there are only a few blockchain funds available at the moment, the numbers are growing.
But most funds only allow 'professional' investors (they really mean ultra-rich) and have minimum investment criterion running into millions of dollars.
Our fund, however, is different.
Since we have lanched on ICONOMI, it has meant that the minimum investment into our DeFi Infrastructure Fund has fallen from €1,000,000 to €10.
This means that anybody can now invest with us and gain exposure to blockchain investments without having to risk millions.
Criticism of Blockchain Funds
Blockchain funds are relatively new on the market and recently gained popularity in the industry.
As the innovation is still new, so it is not that simple to define trends or derive conclusive outcomes from the fund’s recent performance. However, many blockchain funds have delivered positive returns in the last few years. For example, our fund has returned over 5700% since 2020.
That being said, some people working in the investment industry are still concerned and that’s why they don’t recommend investing in blockchain funds.
The majority of financial advisors and stockbrokers don't recommend funds such as ours to clients. The underlying reason for this is usually due to them not understanding the opportunity on offer. Instead, their clients get to make returns of around 8% per annum - doing what they've always done and getting what they've always got.
Furthermore, according to some 'experts', it is not yet clear whether it is a lasting technology with long-term benefits. Again, this shows a lack of intellectual rigor and perhaps it might be worth questioning as to whether such people are really investment experts.
Blockchain funds also feature the inherent risk of investing in technology-based startups as the whole blockchain idea is new and still evolving. But the returns that we make for our clients speak for themselves.
How can I invest in Utopia Digital Asset Management's DeFi Infrastructure Fund?
It's easy for anyone to invest. All that you need is a valid ID and a bank account.
To get started, click here and click 'copy strategy' on the ICONOMI page.