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

What the S&P 500 Did for Equities, Indices Will Do for Crypto

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.

Key regulatory & institutional milestones

• ETF approvals: Beyond the initial spot bitcoin (BTC) and ETH ETF approvals, they now extend to Solana and other cryptocurrencies.
• MiCA regulation: The EU’s Markets in Crypto-Assets (MiCA) framework represents the first comprehensive crypto licensing in a tier-one market. OKX was the first global exchange to secure a MiCA license, enabling it to offer regulated services to over 400 million Europeans. Since then, Coinbase, Kraken, Robinhood, and Bybit have also obtained MiCA licenses, signalling industry growth and broader adoption.
• Stablecoin Genius Act: This new US Federal framework for stablecoin issuers aims to provide regulatory clarity, foster innovation, and protect consumers. Circle’s recent listing on the NYSE, coupled with central bank digital currency (USDC) becoming the EU’s preferred compliant stablecoin (adopted by exchanges like Coinbase, OKX, and Binance), marks a pivotal moment for stablecoins.

Growing stablecoin adoption

Eightcap’s 2025 data shows stablecoin payments now account for 18 percent of monthly deposits, and the most popular of these deposits are in Tether (USDT), reflecting a broader trend. In 2024, stablecoins processed an estimated $27.6 trillion, surpassing Visa and Mastercard’s combined transaction volume by 7.7 percent.

The role of indices

The current crypto market parallels the equities market before the S&P 500. The introduction of broad-based indices coming into the market marks a significant step forward.

A call to action

The time is critical for developing cryptocurrency indices that can bring order to the current chaos. CoinDesk 20, now available in over 20 investment vehicles globally through Eightcap, ML Tech, WisdomTree and others, exemplifies how indices can provide clarity, transparency and diversified exposure to digital assets. The industry must build on this foundation, creating even more robust tools for traders and investors. The full integration of digital assets into the global financial ecosystem is not just a possibility, but an inevitability.

— Patrick Murphy, chief commercial officer, Eightcap

Ask an Expert

Q: Why are crypto indices the logical next step for institutional adoption, similar to what the S&P 500 did for equities?

A: The S&P 500 simplified complexity, bringing structure, benchmarking, and ease of access. Instead of needing to underwrite every individual stock, investors could access a broad, rules-based proxy for U.S. stock market exposure. That unlocked trillions in capital inflows. Crypto today remains fragmented, noisy, and challenging to benchmark. It needs the same evolution. Institutional allocators and many retail investors aren’t asking “Which token should I own?” — they’re asking how to access diversified, well-balanced exposure to the asset class. Index products are how crypto becomes investable at scale. It’s not about picking particular coins but about delivering exposure through rules-based systems that meet compliance, liquidity, and transparency standards. The emergence of crypto-native indices and systematic strategy wrappers is the necessary evolution to move from speculation to scalable allocation.

Q: Why does the absence of crypto indices hinder adoption by institutional allocators and financial advisors?

A: Indices are essential tools for allocation, benchmarking, and communication. Without them, it’s nearly impossible for institutional investors or advisors to justify crypto exposure within traditional asset allocation frameworks. They lack a reference point for performance, volatility, and risk contribution. Advisors can’t model it; CIOs can’t underwrite it; committees can’t approve it. The result is friction across investment, compliance, and operational layers. Indices are what translate crypto from an abstract opportunity into a defined, investable exposure.

Q: How does indexification of crypto reshape the opportunity set for both allocators and systematic strategies?

A: Indices create the structure that both allocators and quant managers need. For institutions, they offer benchmarkable exposures that can be modelled, monitored, and approved within traditional investment frameworks. For systematic strategies, indices become usable components: inputs for factor models, hedging layers, or allocation signals. But to fully unlock this potential, the participants need an institutional wealth management infrastructure: real-time P&L and risk dashboards, customizable strategy access via API, and secure, non-custodial deployment across top-tier exchanges. With the help of the right wealth platform, indices transition from passive benchmarks to dynamic building blocks: ready to be allocated to, traded systematically, and embedded directly into institutional quant workflows.

— Leo Mindyuk, CEO, ML Tech

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