Schwab Report: Most Crypto Value Concentrated in Foundational Networks

A new report from Schwab’s Center for Financial Research breaks the crypto market into three layers—networks, infrastructure, and products—and finds most value remains in foundational blockchains like Bitcoin and Ethereum.

Schwab emphasizes that crypto is not a single asset class but a complex ecosystem. As spot crypto ETFs make the market more accessible to mainstream investors, understanding where value sits is critical.

The three layers:

• Networks: Foundational blockchains such as Bitcoin and Ethereum form the base. These networks process transactions and support nearly all other crypto applications. As of the end of 2025, they accounted for nearly 80% of the $3.2 trillion crypto market cap.
• Infrastructure: Middle-layer protocols—including oracles, cross-chain bridges, and scaling tools—connect blockchains and applications. Essential but less visible, they face challenges from low user interaction and easy switching to competitors.
• Products: User-facing applications like exchanges, lending platforms, and staking services. These platforms tend to have higher switching costs and potential to become industry standards, with Aave (AAVE) and Lido (LDO) cited as examples.

Schwab compares crypto to traditional software: networks resemble cloud platforms (AWS, Azure), infrastructure functions like back-end tools, and products act as consumer-facing applications such as Salesforce or Netflix.

The report also introduces a framework for evaluating crypto: network effects, market share, scalability, and tokenomics. Ethereum leads the smart contract sector, benefiting from adoption and strong network effects, though slower transaction speeds and concentrated ownership pose risks.

Key takeaway: foundational networks hold most of the market’s value, while infrastructure protocols often struggle. Schwab stresses that crypto remains speculative, and investors should focus on where value truly resides—networks and widely used products.