The institutionalization of crypto beta

^{With additional analysis from Adrian Fritz}

In 1976, Vanguard launched the first index fund available to individual investors. It aimed to raise $150 million, raised $11.3 million, and was nicknamed “Bogle’s Folly”.¹ Today, passive funds hold about 55% of US fund assets, $19.4 trillion at year-end 2025.²

Owning the market was not a new idea. What changed was the wrapper: a low-cost, standardized product that gave individual investors a strategy previously limited to institutions.³ The product came first, and the capital followed.

Crypto has already lived through its stock-picking era

Until 2016, crypto was essentially Bitcoin, with more than 80% of the market. The 2017 boom in new token issuance cut that share to 37% by January 2018. Most of those projects failed, and Bitcoin’s share recovered above 70% by 2019. DeFi and NFTs pushed it back to around 40% in 2020 and 2021. Since the 2022 bear market it has climbed again, to 71% in June 2025 and 68% today.⁴

The dispersion shows up in the numbers. Since March 2020, the market value of assets outside the top 10 grew almost fifteenfold, against roughly tenfold for Bitcoin. It then fell 84% from peak to trough, against 76% for Bitcoin. (Market values include newly launched tokens and are not investable returns.) At the token level the spread is wider: Solana rose more than 11,000% in 2021 and fell 94% in 2022, while Ethereum rose 399% in 2021 and then lagged Bitcoin in each of the next four years. Bitcoin fell less than the rest of the market in every major bear market since 2018, and the rest outpaced it in two of the last three bull markets. No one segment has led every phase.⁴