Tapping Into the Digital Future
The market for digital assets has experienced tremendous growth in recent years. Cryptocurrencies have led this growth, seeing their total market capitalization increase by nearly 70%– from US$2.3 trillion at the end of 2021 to roughly US$4.0 trillion1 in August 2025–despite weathering a deep bear market in 2022–2023 (a "crypto winter" in which market capitalization fell by approximately US$2 trillion decline from peak to trough).
A number of factors contributed to cryptocurrencies' rapid rebound including: a broader recovery in financial assets; the rollout of new regulatory frameworks that provided clearer guidelines and greater legitimacy; increased institutional investment; and the emergence of new use cases for digital assets, distributed ledger technology (DLT), and other associated technologies.
We believe there are a number of ways for investors to access—and potentially benefit from—the growing digital-asset ecosystem. One way is to invest in digital assets alongside a diversified, actively managed portfolio of traditional equities. This can provide many advantages, including (i) ease of access and broader exposure to an ecosystem of technologies and businesses that extend beyond the biggest cryptocurrencies, and (ii) the transparency and validation that comes from meeting the requirements of the listed exchanges (for instance, Coinbase, a US-based crypto exchange, is listed and included in the S&P 500 Index).
Definitions:
Digital AssetAnything stored digitally and is uniquely identifiable that can be used to realize value.
CryptoassetAny digital asset that uses cryptographic technologies to maintain its operation as a currency or decentralized application.
Distributed Ledger Technology (DLT)A database that is shared by multiple participants, in multiple places. This is the basis for blockchains.
BlockchainA distributed ledger system where a sequence of “blocks,” or units of digital information, are stored consecutively in a public database, cryptocurrencies for example.
A Closer Look at the Digital Assets Ecosystem
The Rapid Growth of Crypto Adoption
There are several challenges in measuring the number of cryptocurrency users, but most estimates show rapid growth—one widely cited estimate is that global crypto ownership has expanded by 75% since 2021, from roughly 320 million to 562 million in 2024, representing 6.8% of the global population.2 The top adopters by share of population are the United Arab Emirates and Singapore, and the top 30 countries with the highest adoption rates represents a mix of developed and emerging economies.2 Surveys of institutional investors also suggest significant momentum for adoption, including one conducted in 2024 by Ernst & Young in which 94% of respondents said they believed in the long-term value of blockchain technology and digital assets.3
However, the DLT underlying cryptocurrencies has many additional potential applications like payments, tokenization, and smart contracts.
A Wide Range of Applications
Payments
One of the most well-known applications of DLT is its use to support new means of payment, like Bitcoin, the first cryptocurrency which was created in 2008. Key benefits of cryptocurrencies versus traditional payment systems include: enhanced security provided by encryption protocols; the ability to maintain transaction records; disintermediation; low transaction fees; the potential to reach underbanked populations; speed and unfettered hours of operation; and, in some cases, programmability.
Here are two examples of the benefits of payments applications:
- Cost: As of August 2025, the fee for an international wire transfer from Hong Kong was more than US$33 per transaction.5 On the other hand, network fees for transferring Bitcoin from one crypto exchange user to another were US$0.86 per transaction6 (excluding onboarding and exit costs).
- Time: International wire transfers average one-to-five business days. Bitcoin transfers average several minutes or longer, depending on network traffic.
Due, in part, to their low cost and high speed capabilities, the cryptocurrency adoption rate for payment transactions has gained steam. Exhibit 1 shows recent 24-hour trading volume for the top ten cryptocurrencies by market capitalization.
Of these, Tether and USD Coin are stablecoins, a fast-emerging segment of cryptocurrencies with its value pegged to other assets—overwhelmingly the US dollar, but also other currencies or commodities like gold. One of their main uses so far has been to act as a bridge between fiat money and digital assets and between different digital assets. Many digital asset platforms make it easier to transact in digital currencies than fiat currencies, and stablecoins’ “pegged” value is particularly useful for doing so. However, stablecoins are also attractive in other ways, including: as a store of value, particularly in countries with volatile fiat currencies or high inflation; as a gateway to the financial system for unbanked communities; and for cross-border payments and remittances. As of August 2025, stablecoins had a market capitalization of US$250 billion, which the US Treasury Borrowing Advisory Committee believes could reach US$2 trillion by 2028.7
Stablecoins: Cryptocurrencies with its value pegged to that of other assets – overwhelmingly the US dollar, but also other currencies or commodities like gold.
EXHIBIT 1
Top 10 Cryptocurrencies by Market Capitalization
As of 26 June 2025.
Source: CoinMarketCap, Statista
Tokenization
Another major application of DLT is to house tokenized real-world assets. Tokenization allows these assets to be divided into smaller units, affording them easier trading and fractionalized ownership, as well as other potential attractions associated with the use of blockchain networks like increased liquidity, transparency, and greater accessibility for more investors. An early example of tokenization is that of fine art, or turning artwork into non-fungible tokens (NFTs) to allow easier transfer of ownership. Today, tokenization has found many more applications, notably in the financial industry.
Applications of tokenization in the financial industry include exchange-traded products (ETPs) such as debt instruments, investment funds, and other securities. Another example is a tokenized money market fund. Ownership of one share in the US$420 million Franklin OnChain U.S. Government Money Fund is represented by one “BENJI” token.8 Similarly, a recently launched tokenized USD Institutional Digital Liquidity Fund “BUIDL” on the Ethereum network is a further illustration.9 As of August 2025, there were 48 tokenized Treasury products globally, worth US$6.7 billion in market capitalization.
McKinsey estimates that the financial industry alone could account for around US$2 trillion worth of tokenized assets by 2030—led by cash and deposits, mutual funds and ETFs, and loans and securitization—and could be double that in a bullish scenario.10 Aside from ETPs, the real estate, private/alternative assets, commodities, art and collectibles industries11 likely carry significant potential for tokenization, given the attractions of greater accessibility, transparency, liquidity, and fractional ownership.
Tokenization: The process of representing an asset, or linking it, to a “token” that is recorded on a distributed ledger network.
Smart Contract
A third application of DLT is to operate smart contracts, which can flexibly automate complex processes. Potential uses may include dividend payments, insurance claims, trading of virtual assets, and identify verification, among many other areas that can be automated for cost savings and efficiency (Exhibit 2)12.
Smart Contract: Agreements operating on DLT that are programmed to be automatically executed upon meeting predefined conditions.
EXHIBIT 2
Examples of DLT Application in Industries
Conclusion
Digital assets have experienced tremendous growth in recent years. In our view, this is a rapidly evolving ecosystem that is increasingly entering the mainstream with potential for future growth and an attractive opportunity for investors. Moreover, as the asset class continues to mature and evolve, we expect new use cases and business models to continue to emerge.
Investing in listed equities with exposure to digital assets and the underlying technology provides exposure to innovative companies that are positioned to benefit from the growth of the broader digital assets economy and from adoption of DLT and other associated technologies, as well as to the price of cryptocurrencies. For many investors, this approach may be more attractive than direct or indirect ownership of cryptocurrencies, due to: reduced concerns about access, custody, and security; lower volatility; greater diversification; risk management; and greater exposure to the full ecosystem. Active and flexible portfolio management can help investors adapt to the nuances as the asset class evolves.
Notes
1. Global Cryptocurrency Market Cap Charts (Coingecko, 2025)
2. The State of Global Cryptocurrency Ownership in 2024 (Triple A, 2024)
3. Gaining Ground: How Institutional Investors Plan to Approach Digital Assets in 2024 (EY, 2024)
4. CoinMarketCap (CoinMarketCap, 2025)
5. Service Charge (Bank of China [Hong Kong], n.d.)
6. Mean Transaction Fee of Bitcoin from July 2010 to August 4, 2025 (Statista, 2025)
7. Digital Money (Treasury Borrowing Advisory Committee, 2025)
8. Franklin Templeton Launches Tokenized Money Market Fund Benji on the Avalanche Network (Avalanche, 2024)
9. BlackRock, Securitize Expand $1.7B Tokenized Money Market Fund BUIDL to Solana (CoinDesk, 2025)
10. From Ripples to Waves: The Transformational Power of Tokenizing Assets (McKinsey & Company, 2024)
11. An Investment Perspective on Tokenization — Part I (Urav Soni, Olivier Fines, CFA, and Jinming Sun, CFA, 2025)
12. What Are Smart Contracts? Automated Blockchain Agreements Explained (OSL, 2025)
Disclaimers
Published on 2 June 2026.
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