Crypto for Advisors: From Equities to Crypto
0Crypto may be nearing its S&P 500 moment, with indices set to provide legitimacy, structure, and mainstream adoption for digital assets.
You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.
In today's Crypto for Advisors newsletter, Patrick Murphy from Eightcap, provides insights on the maturation of crypto as an asset and compares the evolution of Indices to the S&P’s early days.
Then, Leo Mindyuk from MLTech answers questions about indices in Ask an Expert.
Happy reading!
– Sarah Morton
Much like crypto today, equities in the early 20th century were an emerging and largely unregulated market, characterized by significant fragmentation and a lack of widespread public understanding. In 1957, when the S&P 500 was introduced, it revolutionized the financial landscape, providing a benchmark for investors. Not only did this legitimize equities as an asset class, but it also paved the way for mainstream adoption. Are we at similar crossroads with cryptocurrency? With indices poised to play a transformative role in its maturation, it appears to be so.
Cryptocurrency’s maturation and the evolving role of indices are making indices catalysts for wider crypto adoption. For example, the CoinDesk 20 Index (CD20) serves as a benchmark for the broader crypto market, helps provide market insights and acts as a building block for products to expand investor opportunities.
A fragmented and volatile market?
The crypto market is a fragmented landscape, a paradox of innovation and instability. While over 23,000 cryptocurrencies exist, the vast majority suffer from low trading volume and limited liquidity. This “long tail” includes a significant percentage of projects that never gained traction; estimates suggest over 50 percent of cryptocurrencies launched since 2021 have ceased to exist. A stark example: 1.8 million tokens became “dead coins” in the first quarter of 2025 alone.
Despite this sheer volume, trading activity remains heavily concentrated in a handful of top cryptocurrencies, highlighting the market's true fragmentation.
High volatility is a defining characteristic of crypto's fragmentation, vividly demonstrated by bitcoin's dramatic crashes and bull runs. Price “pumps” often appear out of the blue, and paradoxically, the market can remain stagnant even in the face of significant news. Prices frequently defy logical movement following major announcements, only to suddenly spike or drop without an obvious catalyst. This unpredictability underscores how structurally thin and concentrated trading remains across the market.
An example of this phenomenon is the SEC's approval of Ether (ETH) exchange-traded funds (ETFs) in May 2024. Despite being a major regulatory milestone, ETH barely moved on the day of the announcement. A week later, however, it surged 15 percent with no discernible new information. These kinds of delayed and illogical reactions are surprisingly common, highlighting how thin liquidity, concentrated holdings, and sentiment-driven trading continue to dominate large segments of the crypto market.
Signs of maturation
Despite its current challenges, the crypto market is showing clear signs of maturation. Institutional interest is surging, with major financial players investing, partnering, and developing crypto-focused products. Regulatory clarity is also improving globally.
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https://www.coindesk.com/coindesk-indices/2025/08/20/crypto-for-advisors-from-equities-to-crypto
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