Crypto for Advisors: Beyond Bitcoin and Ether

Updated 11 hrs ago Published 11 hrs ago

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Greetings, financial advisors!

In this edition of our newsletter, Glenn Williams Jr. from ProShares details why market participants are looking past bitcoin and ether to mitigate concentration exposure by utilizing multi-asset benchmarks.

Following that, our “Ask an Expert” segment looks closely at major institutional shifts and the rising preference for spot exchange-traded funds.

Enjoy your reading.

Why crypto investors may look beyond bitcoin and ether

The digital asset marketplace is expanding rapidly, with fresh protocols and networks launching across the ecosystem daily. Although bitcoin and ether remain the most recognized digital currencies, they represent merely a pair out of thousands of alternate tokens. As of the time of this writing, TradingView figures place the aggregate cryptocurrency market valuation at roughly $2.5 trillion, covering a vast spectrum of utilities and functionalities across the sector. For market participants seeking exposure to this developing asset category, narrowing their focus to a single coin or a couple of tokens can lead to missed opportunities across the wider marketplace.

This distinction has grown increasingly critical as the crypto space matures. Bitcoin has largely cemented its position as the premier store-of-value holding in the market, whereas ether stays strongly linked to smart contracts and decentralized applications. Beyond those two primary tokens, however, networks have surfaced focusing on everything from accelerated transaction settlement and decentralized finance to network interoperability, data infrastructure, and alternative use cases. Stated differently, the crypto sector is progressively transforming into a compilation of diverse technologies and applications rather than merely a selection of bitcoin alternatives.

Such variances also imply that sector dominance can shift over time. As demonstrated throughout prior market cycles, phases heavily led by bitcoin performance can eventually yield to broader participation across the entire asset class. This does not automatically indicate that smaller digital currencies will outperform bitcoin or ether. It does suggest, however, that a portfolio heavily weighted toward the two largest assets might experience constrained participation should investor interest expand elsewhere.

How a multi-asset index addresses concentration in crypto

The CoinDesk 20 Index was built to supply diversified exposure to the crypto asset class via a transparent, rules-driven benchmark comprising 20 of the biggest and most liquid digital currencies. The index omits memecoins, stablecoins, and certain other tokens, undergoing quarterly reconstitutions to reflect ongoing market shifts.

Significantly, the index is engineered not only to deliver broader market participation but also to curb heavy concentration in its leading components. Bitcoin and ether command a massive portion of total crypto market capitalization, meaning a conventional market-cap-weighted index would be dominated by those two assets alone.

The CoinDesk 20 Index tackles this concentration problem through a modified market capitalization weighting system. The index enforces:

· A 30% ceiling on the single largest component

· A 20% ceiling on all remaining constituents

These caps restrict excessive reliance on any single digital asset and allow other prominent cryptocurrencies to assume a more substantial weight within the index.

Left: Source: CoinDesk, as of June 30, 2026. Right: ProShares hypothetical calculation using the CoinDesk 20 Index constituents, weighted by market capitalization without the index caps, as of June 30, 2026. For illustrative purposes only.

Without these caps in place, the benchmark would predominantly mirror the trajectory of bitcoin and ether alone. By capping concentration in the dominant coins, the CoinDesk 20 Index fosters a more balanced exposure across a broader spectrum of cryptocurrencies.

There is additionally a practical factor to consider. Replicating comparable exposure independently would necessitate an investor to purchase, safely store, and routinely rebalance a sizable quantity of individual tokens. Although underlying custody solutions have advanced notably, maintaining multiple digital assets still involves navigating various trading platforms, digital wallets, secure custody setups, and logistical hurdles. An index-oriented strategy streamlines this workflow while preserving participation in ongoing developments across the broader market.

The regulatory climate governing digital assets keeps evolving, with lawmakers and regulators striving to establish more definitive guidelines regarding how tokens are issued, traded, and safeguarded. Enhanced regulatory certainty could ultimately facilitate the integration of additional segments of the crypto ecosystem within mainstream financial markets.

This progression is vital because the subsequent wave of crypto adoption may not necessarily mirror the prior one. Bitcoin and ether could retain their status as the largest network assets while fresh protocols and tools mature alongside them. Predicting in advance which specific technologies will secure the highest level of adoption remains challenging, rendering diversification an effective method to capture exposure without needing to pick future winners ahead of time.

Looking beyond bitcoin and ether does not equate to abandoning them. The CoinDesk 20 Index continues to retain substantial allocations in both bitcoin and ether while delivering targeted exposure to the broader crypto landscape.

– Glenn Williams Jr., crypto markets analyst, ProShares

Ask an Expert
Why is diversification important in crypto?

Bitcoin marks merely the starting point. Out of more than 20,000 actively monitored and traded tokens, bitcoin presently holds a dominance level of roughly 60%. Diversification remains crucial for institutional investors seeking to manage volatility and capture wider market prospects. Benchmarks can serve as an efficient mechanism for tracking asset category returns, whereas vehicles like exchange-traded funds (ETFs) and separately managed accounts (SMAs) offer simultaneous exposure to multiple digital assets.

What institutional investor trends are you seeing in digital assets?

Institutional players are entering the market, elevating digital assets from a niche investment category into a core asset class. EY-Parthenon and Coinbase carried out a 2026 study involving upwards of 350 institutional investors. Among those surveyed, nearly three-quarters (73%) intended to expand their crypto allocations throughout 2026, and 74% anticipated crypto valuations to climb over the ensuing 12 months. Furthermore, the findings indicated that regulated products have become the standard gateway for institutional crypto participation. Two-thirds (66%) of participants already maintain holdings in spot crypto ETFs and ETPs, with 81% stating a preference for accessing spot exposure via a registered financial product.

What broad-based benchmarks exist in crypto?

Numerous multi-asset indices are emerging within the crypto space. As highlighted by ProShares, the CoinDesk 20 Index tracks the returns of premier digital assets, whereas the CoinDesk 5 Index monitors the performance of the five biggest constituents within the CoinDesk 20. The CoinDesk 20 was formulated for liquidity and is accessible globally across 20 investment products, including the ProShares CoinDesk 20 Crypto ETF (KRYP) and the WisdomTree Physical CoinDesk 20 ETP (WCRP). The CoinDesk 5 underpins the inaugural U.S. multi-crypto ETP, known as the Grayscale CoinDesk Crypto 5 ETF (GDLC). CoinDesk Data & Indices additionally provides the CoinDesk 80, CoinDesk 100, the CoinDesk Memecoin Index, alongside hundreds of BMR-compliant benchmarks designed for measuring, investing, and trading across the expanding crypto universe.

– Kim Klemballa, CoinDesk Data & Indices

Keep Reading

• The CLARITY Act fails to progress through the Senate, missing the 60-vote threshold necessary to advance.
• Canada’s federal banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), clarifies that tokenized deposits must adhere to the exact regulatory standards governing conventional deposits.
• The UK House of Lords adopts an amendment obligating the Treasury to release a national digital asset strategy within 12 months, encompassing crypto, stablecoins, and tokenized securities.

Seeking additional insights? Get the newest cryptocurrency updates from coindesk.com and market commentary from coindesk.com/institutions.

This content is provided for informational purposes only and does not constitute financial advice. Any forward-looking remarks included herein reflect the current assumptions of ProShare Advisors LLC. Whether actual outcomes and trends align with the expectations and forecasts of ProShare Advisors LLC depends on a variety of risks and variables, such as broader macroeconomic, financial, and industry conditions; legislative or regulatory adjustments and actions taken by government authorities or regulatory agencies; as well as international economic and political developments. ProShare Advisors LLC assumes no obligation to update or revise any forward-looking statements, whether as a consequence of new data, subsequent events, or otherwise. Investing entails financial risk, which includes the potential loss of initial capital.

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Originally published at https://www.coindesk.com/coindesk-indices/2026/09/17/crypto-for-advisors-beyond-bitcoin-and-ether.