Welcome to our institutional newsletter, Crypto Long & Short. This week:
- Lukas Enzersdorfer-Konrad on how EU regulatory clarity could allow tokenized markets to scale
- Andy Baehr tells BNB to “dress up”
- Top headlines institutions should be aware of by Francisco Rodrigues
- “Bitcoin’s Draws Compress as Markets Mature” in Chart of the Week
-Alexandra Levis
Expert insight
Europe’s role in the next tokenization wave
– By Lukas Enzersdorfer-Konrad, CEO, Bitpanda
The tokenization of real-world assets (RWAs) has moved from buzzword to business case. It has become the basis for institutional blockchain adoption. In the first half of 2025 alone, the value of tokenized RWAs increased by 260%, reaching $23 billion in on-chain value. Over the past several years, the sector has experienced rapid and sustained growth, enough to shift tokenization from an experimental concept to a core pillar of digital asset infrastructure. This signals a structural shift in how financial markets are built and ultimately expanded.
Tokenization is emerging as the basis for institutional blockchain adoption, with BlackRock, JPMorgan and Goldman Sachs publicly exploring or implementing related initiatives and major institutions validating its potential. Despite this momentum, growth remains limited. Most assets are still embedded in approved systems, segmented by regulatory uncertainty and limited interoperability. Scalable public network infrastructure remains underdeveloped, slowing the path from institutional pilots to mass market participation. In short, tokenization works, but the market rails to support global adoption are still being built.
What is missing? regulation, as an enabler. Institutions need clarity before committing to balance sheets and building long-term strategies. Retail investors need transparent rules that protect them without shutting them out. Markets need standards they can trust. Without these elements, liquidity remains shallow, systems remain stagnant, and innovation struggles to move beyond early adopters.
Europe has undoubtedly emerged as an early leader in this area. With MiCA now in force and the DLT Pilot Regime enabling experimentation with structured digital securities, the region has moved beyond fragmented sandboxes. The European market is the first to implement a unified, continent-wide regulatory framework for tokenized assets. Instead of treating compliance as an obstacle, the region has elevated regulatory clarity to a competitive advantage. It provides the legal, operational and technical security that institutions require to innovate with confidence and at scale.
The continent’s regulatory-first approach is already generating tangible momentum. Under MiCA and the EU’s DLT pilot regime, banks have begun issuing tokenized bonds on regulated infrastructure, with European issuance exceeding €1.5 billion in 2024 alone. Asset managers are testing on-chain fund structures designed for retail distribution, while fintechs are integrating digital asset rails directly into licensed platforms. Together, these developments mark a shift from pilot programs to live deployment, reducing one of the industry’s longest-standing bottlenecks: the ability to build compliant infrastructure from day one.
A new phase: interoperability and market structure
The next frontier for tokenization will depend on interoperability and common standards, areas where Europe’s regulatory clarity can once again set the pace. As more institutions bring tokenized products to market, fragmented liquidity pools and proprietary frameworks risk recreating silos of traditional finance in digital form.
While traditional finance has spent years optimizing for speed, the next wave of tokenization will be shaped by trust in who builds and manages the infrastructure, and whether both institutions and retail participants can trust it. Europe’s clarity about rules and market structure gives it a credible opportunity to define global standards rather than simply follow them.
The EU can strengthen this position by encouraging interoperability across chains and common standards for disclosure. Establishing common rules early on would allow tokenized markets to scale without repeating the fragmentation that slowed past financial innovations.
This week’s headlines
– By Francisco Rodrigues
President Donald Trump’s surprise nomination of Kevin Warsh to lead the Fed introduced new variables that rattled markets. The precious metals rally saw a sharp sell-off, while cryptocurrency prices endured a major correction, with major players nevertheless moving to capture value.
Vibe Check
Put on some clothes, BNB
– By Andy Baehr, Head of Product and Research, CoinDesk Indices
Last week’s CoinDesk 20 (CD20) reconstitution brought BNB into the index for the first time. This wasn’t a matter of size – BNB has long been one of the largest digital assets by market cap. It was a matter of meeting the liquidity and other requirements governing CD20 inclusion. For the first time, BNB cleared these obstacles.
The result? One of the biggest compositional changes since the index launched in January 2024. BNB enters the CD20 with a weight of over 15%, making it an immediate heavyweight in the lineup.
From a portfolio construction perspective, this is a meaningful shift. BNB has historically exhibited lower volatility than the broader CD20, which may reduce the index’s overall risk profile. Its correlation with other index constituents has been moderate rather than lockstep (until recently, at least), adding a diversification benefit. The potential result: a more diversified index with lower risk.
Of course, adding a big name means pushing other components down the weight ladder, even with the deck mechanisms the CD20 employs. The pie chart clearly tells that story – existing stocks are being compressed to make room for the new arrival.
As crypto enters what we’ve called its “second year” of institutional maturity, CoinDesk 20 begins its own third year of life. The index evolves along with the market it is intended to capture.
Sunday Horrors (Real or Imagined?)
This past weekend felt tough. Bitcoin traded below $75,000, billions in liquidations were clocked, and if you’re into crypto, you probably saw it happen in real time. Whether you count 24/7 market access as a blessing or a curse, it’s simply a fact now.
After a few weekends like this, it starts to feel like a pattern – like crypto is absorbing the worries of the world while traditional markets sleep. So we decided to test that feeling against the data.
The scatter plot shows daily returns for the CoinDesk 20, with weekend moves highlighted separately. Yes, there are a few instances of excessive downward movement on Saturdays and Sundays. But there are also plenty of quiet weekends – and plenty of everyday chaos that doesn’t fit the narrative.
It could be memory inflation. Painful weekends stick more in our minds than calm ones. The drama of watching markets move when others aren’t paying attention adds to the psychological weight. The data suggest that Sunday hawking may be more perception than pattern.
Still, after a weekend like this last one, the feeling is real, even if the statistical significance is not. We keep indexing it all—tracking what’s happening, measuring what matters, and trying to separate signal from emotion.
Chart of the week
Bitcoin’s drawdowns are compressing as markets mature
Bitcoin’s peak-to-trough draws have steadily compressed over time, moving from -84% in the first epoch (post-1st halving) to a current cycle high of -38% as of early 2026. This sustained reduction in “peak pain” suggests a structural shift toward market maturity as institutions, relative to a more stable ETF floor capital, establish a more stable ETF price. 80%+ crash from previous eras. Historically, bitcoin has taken approximately 2 to 3 years (roughly 700 to 1,000 days) to fully recover from major cycle lows to new highs, although the speed of recovery has increased recently, with Epoch 3 regaining its peak in just 469 days.
Listen. Read. Clock. Engage.
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