Welcome to our institutional newsletter, Crypto Long & Short. This week:
- Lukas Enzersdorfer-Konrad explains how EU regulatory clarity could allow tokenized markets to grow
- Andy Baehr tells BNB to “dress up”
- Top headlines that institutions should pay attention to by Francisco Rodrigues
- “Bitcoin dips compress as markets mature” on chart of the week
-Alexandra Levis
Expert Perspectives
Europe’s role in the next wave of tokenization
– By Lukas Enzersdorfer-Konrad, CEO of Bitpanda
Tokenization of real-world assets (RWA) has gone from a buzzword to a business case. It has become the foundation of institutional blockchain adoption. In the first half of 2025 alone, the value of tokenized RWA increased by 260%, reaching $23 billion in on-chain value. In recent years, the sector has seen rapid and sustained growth, enough to move tokenization from an experimental concept to a central pillar of digital asset infrastructure. This indicates a structural change in the way financial markets are built and ultimately expanded.
Tokenization is emerging as the foundation of institutional blockchain adoption: BlackRock, JPMorgan, and Goldman Sachs have all explored or publicly implemented related initiatives, and major institutions have validated its potential. Despite this momentum, growth remains limited. Most assets are still embedded in licensed 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 are still being built to support global adoption.
Missing? Regulation, as a facilitator. Institutions need clarity before committing to balance sheets and developing long-term strategies. Retail investors need transparent rules that protect them without excluding them. Markets need standards they can trust. Without these elements, liquidity remains scarce, systems remain isolated, and innovation struggles to move beyond early adopters.
Without a doubt, Europe has become one of the first leaders in this area. With MiCA now in place and the DLT pilot regime enabling structured experimentation of digital securities, the region has moved beyond fragmented sandboxes. The European market is the first to implement a unified continental 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 certainty that institutions need to innovate with confidence and at scale.
The continent’s regulation-first approach is already generating tangible momentum. Under MiCA and the EU DLT pilot regime, banks have begun issuing tokenized bonds on regulated infrastructures, with European issuances set to exceed €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 compatible infrastructure from day one.
A new phase: interoperability and market structure
The next frontier of tokenization will depend on interoperability and shared standards, areas where European regulatory clarity could once again set the pace. As more institutions bring tokenized products to market, fragmented liquidity pools and proprietary frameworks risk recreating the silos of traditional finance in digital form.
While traditional finance has spent years optimizing for speed, the next wave of tokenization will be determined by trust in who builds and governs the infrastructure, as well as whether both institutions and retail participants can trust it. Europe’s clarity around 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 promoting cross-chain interoperability and common disclosure standards. Establishing shared rules early would allow tokenized markets to scale without repeating the fragmentation that held back previous financial innovations.
Headlines of the week
– By Francisco Rodrigues
President Donald Trump’s surprise nomination of Kevin Warsh to head the Federal Reserve introduced new variables that shook markets. The rally in precious metals sparked a violent sell-off, while cryptocurrency prices suffered a major correction, although major players moved to capture value.
Environment control
Get dressed, BNB
– By Andy Baehr, Head of Product and Research, CoinDesk Indices
Last week’s CoinDesk 20 (CD20) reconstitution put BNB on the index for the first time. It wasn’t a question of size: BNB has long been one of the largest digital assets by market cap. This was to meet the liquidity requirements and other requirements governing the inclusion of CD20. For the first time, BNB overcame those obstacles.
The result? One of the biggest composition changes since the index’s launch 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 significant change. Historically, BNB has shown lower volatility than the broader CD20, which could reduce the overall risk profile of the index. Its correlation with other components of the index has been moderate rather than uniform (at least until recently), which adds a diversification benefit. The potential result: a more diversified, lower-risk index.
Of course, adding a big name means pushing other components down the weight scale, even with the limiting mechanisms that CD20 employs. The pie charts tell that story clearly: existing properties are compressed to make room for new arrivals.
As cryptocurrencies enter what we have called their “second year” of institutional maturity, CoinDesk 20 is beginning its third year of existence. The index evolves along with the market it aims to capture.
Sunday terrors (real or imaginary?)
Last weekend was difficult. Bitcoin traded below $75,000, billions in liquidations were recorded, and if you’re in the cryptocurrency world, you were probably watching it happen in real time. Whether you consider 24/7 market access a blessing or a curse, it is now simply a reality.
After a few weekends like this, it starts to feel like a pattern, as if cryptocurrencies are absorbing the world’s anxieties while traditional markets sleep. So, we decided to compare that feeling with the data.
The scatterplot shows daily returns for CoinDesk 20, with weekend moves highlighted separately. Yes, there are some cases of large bearish moves on Saturdays and Sundays. But there are also a lot of quiet weekends and a lot of chaos during the week that doesn’t fit the narrative.
It may be memory inflation. Painful weekends stay more etched in our minds than peaceful ones. The drama of watching markets move when others aren’t paying attention amplifies the psychological weight. The data suggests that Sunday terrors may be more of a perception than a pattern.
Still, after a weekend like last, the feeling is real even if the statistical significance is not. We keep indexing everything: tracking what happens, measuring what matters, and trying to separate signal from sentiment.
Chart of the week
Bitcoin declines compress as markets mature
Bitcoin’s peak-to-trough declines have steadily compressed over time, going from -84% in the early epoch (after the first halving) to a current cycle high of -38% in early 2026. This persistent reduction in “peak pain” suggests a structural shift toward market maturity, as institutional capital and spot ETFs establish a more stable price floor compared to the retail-driven 80%+ declines of epochs. previous. Historically, Bitcoin has taken approximately 2 to 3 years (approximately 700 to 1000 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.
Hear. Read. Look. Engage.
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