Not all crypto is equal: Schwab maps where the money actually is in digital assets

Core Insights - The Schwab report categorizes the crypto market into three sectors, highlighting that most value is concentrated in foundational blockchains like Bitcoin and Ethereum [1][2] Group 1: Market Structure - The crypto market is divided into three layers: foundational networks (Bitcoin and Ethereum), infrastructure (software connecting blockchains), and products (exchanges and lending platforms) [2][3][4] - Foundational networks account for nearly 80% of the total crypto market cap, which is $3.2 trillion as of the end of 2025 [2] - Infrastructure software faces challenges due to low user interaction and ease of switching to competitors, impacting their business models [3] Group 2: Product Dynamics - Products in the crypto space, such as exchanges and lending platforms, have more loyal users and higher switching costs, making them more likely to become industry standards [4] - Examples of successful products include Aave for crypto lending and Lido for staking, although specific investment recommendations are not provided [4] Group 3: Comparative Analysis - The report draws parallels between the crypto market and the traditional software industry, likening foundational networks to cloud computing platforms like AWS and Microsoft Azure [5] - Products are compared to user-interactive software like Salesforce or Netflix, while infrastructure software is seen as less capable of commanding loyalty and pricing power [6] Group 4: Investment Framework - Schwab introduces a framework for evaluating cryptocurrencies based on four criteria: network effects, market share, scalability, and tokenomics [7] - Ethereum is highlighted as a case study, leading the smart contract sector with over 10 times the market share of its closest competitor, but facing concerns over transaction speeds and ownership concentration [8]