Schwab Report: Crypto Value Concentrated in Networks and Key Products
A new report from Schwab’s Center for Financial Research divides the crypto market into three layers—networks, infrastructure, and products—and finds that most value remains in foundational blockchains like Bitcoin and Ethereum.
Schwab emphasizes that crypto is not a single asset class but a complex ecosystem. With spot crypto ETFs making the market more accessible to mainstream investors, understanding where value truly lies is crucial.
The three layers:
- Networks: Bitcoin and Ethereum form the base, processing transactions and supporting nearly all other crypto applications. These networks accounted for nearly 80% of the $3.2 trillion crypto market cap at the end of 2025.
- Infrastructure: Protocols like oracles, cross-chain bridges, and scaling tools connect blockchains and applications. Essential but less visible, these projects face challenges due to limited user interaction and easy competition.
- Products: Exchanges, lending platforms, and staking services engage users directly. With higher switching costs and potential to become industry standards, Schwab highlights Aave (AAVE) and Lido (LDO) as examples.
Schwab compares the ecosystem to software: networks are like cloud platforms (AWS, Azure), infrastructure resembles back-end tools, and products are like consumer-facing apps such as Salesforce or Netflix.
The report also offers a framework for evaluating crypto: network effects, market share, scalability, and tokenomics. Ethereum leads the smart contract sector with strong adoption, though slower transactions and concentrated ownership present risks.
Key takeaway: Foundational networks hold most of the market’s value, while infrastructure projects often struggle. Schwab stresses that crypto remains speculative, and investors should focus on where value truly resides—networks and widely used products.
