Schwab breaks down the crypto market, showing which digital assets attract the most money.

Schwab Report Breaks Crypto Into Three Layers, Highlights Where Value Lives

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

Schwab emphasizes that crypto is not a single asset class but a complex ecosystem, particularly as spot crypto ETFs attract more mainstream investors. Understanding where value resides is critical, the report notes.

The three layers:

Networks: Foundational blockchains such as Bitcoin and Ethereum form the base. They record transactions and support nearly all other crypto applications. Schwab reports these networks accounted for nearly 80% of crypto’s $3.2 trillion market cap at the end of 2025.
Infrastructure: Protocols that connect blockchains—like oracles, cross-chain bridges, and scaling tools—sit in the middle layer. While essential, these projects face challenges: users rarely interact with them directly, and switching to competitors is relatively easy.
Products: Platforms and applications that users engage with directly, including exchanges, lending services, and staking protocols. These tend to enjoy higher switching costs and greater potential to become industry standards. Schwab cites Aave (AAVE) and Lido (LDO) as examples.

Schwab compares the structure to the software industry: networks are like cloud platforms (AWS, Azure), infrastructure resembles back-end tools, and products are like consumer-facing applications such as Salesforce or Netflix.

The report also outlines a framework for evaluating crypto using four criteria: network effects, market share, scalability, and tokenomics. Ethereum illustrates this approach, leading smart contracts with strong adoption and network effects, though slower transaction speeds and concentrated ownership pose risks.

A key takeaway: infrastructure protocols often struggle to retain value despite their importance, while foundational networks hold most of the market’s worth. Schwab stresses that crypto remains high-risk, and investors should focus on where value truly lies—foundational networks and widely used products.