Schwab Report Reveals Where Most Crypto Market Value Is Concentrated. Source: Tdorante10, CC BY-SA 4.0, via Wikimedia Commons
A new report from Charles Schwab’s Center for Financial Research offers a clear breakdown of the crypto market, showing that the majority of value is concentrated in foundational blockchains such as Bitcoin and Ethereum. As spot crypto exchange-traded funds (ETFs) attract more mainstream investors, Schwab emphasizes that crypto should not be viewed as a single asset class, but rather as a diverse ecosystem with major structural differences that significantly impact investment outcomes.
According to the report, the crypto market can be divided into three layers. The first and most dominant layer consists of foundational networks like Bitcoin and Ethereum. These base-layer blockchains are responsible for processing and recording transactions and serve as the backbone for nearly all crypto activity. Schwab estimates that these networks accounted for nearly 80% of the total crypto market capitalization, which stood at approximately $3.2 trillion by the end of 2025. This concentration highlights why foundational blockchains continue to play a central role in crypto investing strategies.
The second layer is infrastructure, which includes protocols such as oracles, blockchain bridges, and scaling solutions. These technologies are essential for connecting blockchains, enabling cross-chain transfers, and improving transaction speeds. However, Schwab notes that infrastructure protocols often face weaker business models. Users rarely interact with them directly, competition is intense, and switching costs are low, making it difficult for these projects to retain long-term value.
The third layer focuses on crypto products, including exchanges, lending platforms, and staking services. These applications interact directly with users and typically benefit from higher loyalty, stronger network effects, and greater potential to become industry standards. Schwab cites examples like Aave in crypto lending and Lido in staking, while stopping short of recommending specific investments.
To help investors evaluate crypto assets, the report introduces a framework based on growth equity principles, including network effects, market share, scalability, and tokenomics. Using Ethereum as an example, Schwab highlights its strong developer adoption and dominant market share, while also pointing out challenges such as slower transaction speeds and concentrated token ownership.
Ultimately, Schwab stresses that cryptocurrencies remain speculative and high-risk. Still, the key takeaway for investors is clear: understanding where value is created within the crypto ecosystem is essential, and that value is most often found in foundational networks and widely used products rather than easily replaceable infrastructure protocols.