Blockchain investment funds
Updated: Sep 8
Blockchain technology is an integral part of many cryptocurrencies such as Bitcoin.
This technology is being also used in a wide range of services, too, in many different industries.
Blockchain is a string or series of information or “blocks” saved on systems and shared across a dedicated network. All members can access each data block, and it remains frozen in time on an open ledger.
Due to this unique functionality, blockchain technology is especially beneficial in industries where you need reliable security, such as banking and supply chain management.
As an investor, the potential upside of blockchain backed cryptocurrencies and tokens is immeasurable.
Here’s what you need to know about Blockchain investment funds.
What is a blockchain investment fund?
Like other popular investments like cloud computing, and artificial intelligence, you can also purchase or invest in blockchain investment funds.
Basically, blockchain investment funds hold a basket of cryptocurrencies and tokens.
These cryptocurrencies and tokens directly employ or use blockchain technology in their services to support this innovation.
Normally, you will find Blockchain Investment Funds in two forms: Passively managed and actively managed.
In passively managed blockchain investments, a fund manager gets a basket of blockchain-based stocks that makes up a wide index. Through these blockchain investments, you can gain exposure to the whole index. In this process no need to work with individual firms and businesses.
As opposite to indexed funds, active blockchain investing depends on a fund manager’s capability to select cryptocurrencies and provide out sized returns on the investments.
As a result, these active blockchain investment funds often have higher fees and greater volatility than their counterparts. However, they can also produce much greater returns.
Our DeFI Infrastructure Fund is actively managed and has created returns of over 5700% since 2020.
We recently made the fund strategy available to everybody via ICONOMI platform and have (at time of writing) created returns at a rate of 3 times more than bitcoin alone.
Risks associated with Blockchain investment funds
Unlike other investments, blockchain investment funds can hold additional sources of volatility. The risks are many, and most of them are market-related, like changes in values or sudden changes in investor sentiment.
Similarly, there are some macro risks, like government regulation.
Take Bitcoin as an example which utilizes blockchain technology to record every transaction. The digital currency was launched in 2009, but this popular crypto is not safe from the skepticism of authorities and investors.
With a massive rise in popularity and extensive adoption, Bitcoin’s price first reached over $20,000 in December 2020. After four months, in April 2021, the price rise to $60,000, more than 200 percent. This is a perfect example of how volatile crypto or Blockchain funds can be.
But there's a saying in investing:
Volatility is the price you pay for performance.
This means that if you want big returns, you also have to take volatility as part of the deal.
Cryptocurrency vs. blockchain Investment Funds: How they are different
For those interested in blockchain investment funds and digital currencies, it’s essential to note that there are not many options for blockchain investment funds currently on the market.
But still, you have many ways to own cryptocurrencies directly or via investment contracts.
Apart from trading in crypto through exchanges, investors can also take part in the emergence of blockchain technology via blockchain investment funds like ours.
Remember that blockchain is the vital part or backbone that powers almost all cryptocurrencies. So, an investment with us is an investment in the future of blockchain.
Is Utopia Digital Asset Management's DeFi Infrastructure Fund a Blockchain Investment Fund?
Yes. Every constituent of our fund is backed by blockchain (or digital ledger) technology. And now our fund is available to everyone via ICONOMI and has a minimum investment of just €10.