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What are digital assets?

Digital assets are a new form of financial assets like precious metals, stocks, or bonds, but they are created and stored digitally. Digital assets can come in many forms such as cryptocurrencies, app-based tokens, and non-fungible tokens (NFTs) that represent something of value or utility.
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Cryptocurrencies

The most common type of digital assets, they are used to pay for transactions to be verified and recorded on a blockchain – like currency (e.g. Bitcoin BTC)

Stablecoins

A type of cryptocurrency that is used to transfer money between cryptocurrencies and fiat currencies – like a poker chip (e.g. Circle USDC)

Investment tokens

A type of app-based token that is used to represent a share of ownership in a project or venture – like a stock (e.g. Sandbox SAND)

Utility tokens

A type of app-based token that is used purchase access to a service – like a ticket to ride a roller coaster (e.g. Chainlink LINK)

Governance tokens

A type of app-based token that is used to enable decentralized decision-making – like a proxy vote (e.g. Maker MKR)

Non-fungible tokens (NFTs)

A type of token that can represent ownership in property, film, art, music, or other digital or real-world items.

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Digital Assets

By the numbers

The digital assets investible universe has expanded rapidly over the past 15 years, making it a growing part of the global capital markets that should not be ignored.

$3+ Trillion

The total market capitalization of the cryptocurrency market – about 5% the size of the S&P 500.1

$110+ Trillion

The amount of bitcoin that that has traded since inception. In 2022 alone,  bitcoin’s network transacted more value than both Visa and Mastercard combined.2

560+ Million

The number of people that own a cryptocurrency - about 7% of the world population.3

15 Years

How long cryptocurrencies have been trading – the average age of a company in the S&P 500 is 18 years.4

The digital asset investment opportunity

Investors throughout history have searched for ways to invest at the early stages of new businesses, ideas and investment opportunities.

While the digital asset ecosystem reached a market capitalization of $3 trillion, it remains a nascent and burgeoning asset class with immense potential for further expansion. In fact, today’s adoption rate of cryptocurrencies parallels that of internet adoption that we saw back in the 1990s.

Like the early technology stocks that of the 1990s, we believe that digital assets and the blockchain technologies they are built on, represents a significant new investment opportunity that has the potential to revolutionize existing business models and the way the world invests.

A new technology megatrend: Use of cryptocurrencies is on pace with internet adoption in 1990s

Adoption curve of cryptocurrency users and internet users
 

Investing in digital assets: A starter guide for institutional investors

Institutional investors have shown growing interest in digital assets but have remained cautious about allocating capital as the $3 trillion asset class continues to rapidly evolve.

This guide is designed to help institutional investors address common questions and considerations when starting to invest in digital assets.

Key topics include:

  • The role of digital assets in an institutional asset allocation.
  • Measuring the fundamental value of digital assets using traditional financial models.
  • Portfolio implementation and position sizing considerations.
  • Methods for establishing long-term capital market expectations for digital assets.
  • Ways of gaining exposure to digital assets, including direct ownership, digital asset ETPs, and actively-managed multi-token strategies.
  • Operational and stakeholder considerations, including resource requirements and effective stakeholder engagement.

Download our digital assets starter guide

Stay up to date with our digital assets research

Explore our monthly market report, educational primers, and research library about the digital assets investment ecosystem.

Educational Primer

A Primer on the Emerging Digital Asset Ecosystem

An overview of Web3, blockchain technology, and digital assets, along with a comprehensive glossary of key terms.

Read more

Top Insights

Insights on Blockchain and Digital Assets

In these articles, our digital assets team shares their perspectives and explains key concepts in this emerging space.

Read more

Go Deeper

Digital Assets Research Hub

Dive into the world of digital assets with our in-depth research on Bitcoin, Ethereum, and other protocols. 

Read more

Featured Webcast

Blockchain and investing in the new protocol-based economy

Investors throughout history have searched for ways to invest at the early stages of new technological trends that have the potential to disrupt and eventually transform economies.

We believe that new blockchain technologies, and the protocol-based networks they enable, represent a significant investment opportunity that has the potential to revolutionize how data is stored, verified, and transferred throughout the world.

In this webcast, investment experts from Coinbase and Franklin Templeton explore the evolution of digital assets, the rise of the protocol-based economy, and the tangible investment opportunities presented by applying blockchain technology to existing industries. 

Key topics:

  • How institutional investors are pioneering investments in digital assets and blockchain-related technologies.
  • How blockchain is enabling a new protocol-based economy and creating new investment opportunities.
  • How traditional investment frameworks can be applied to digital assets.
Watch now

Explore more digital assets and blockchain research

AUGUST 1, 2025

Investing in digital assets: A starter guide for institutional investors

Institutional investors have shown growing interest in digital assets but have remained cautious about allocating capital as the $3 trillion1 asset class continues to rapidly evolve. This guide is designed to help institutional investors address common questions and considerations when starting to invest in digital assets.

MARCH 21, 2025

Back to benchmarks: An intuitive framework for incorporating digital assets into diversified portfolios

There are unique opportunities and challenges in investing in digital assets. For those interested in this exposure, Franklin Templeton Investment Solutions explores the significance of including digital assets, such as bitcoin, first into benchmarks.

MARCH 4, 2025

Myth busting: Three things investors are still getting wrong about crypto

Christopher Jensen, Head of Research, Franklin Templeton Digital Assets, dispels some common investor myths about crypto.

Looking for more information?

Contact a member of the Franklin Templeton Institutional team to learn more about investment strategies, solutions, and services.

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Source and notes:

  1. Source: Coinmarketcap, Artemis, as of April 30, 2025.
  2. Source: “By the Numbers: How Much Volume Has Bitcoin Settled In Its Lifetime?” Bitcoinist. August 2023. “₿REAKING: The Bitcoin Network processed more transaction value than Visa and Mastercard last year.” Crypto News Flash. January 25, 2023.
  3. Source: Triple-A Research, as of May 2024.
  4. Source: The first bitcoin was minted in 2009. Average age of company in S&P 500 provided by McKinsey & Company.

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All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested.

Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions.

Investments in fast-growing industries like the technology sector (which historically has been volatile) could result in increased price fluctuation especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments.

Buying and using blockchain-enabled digital currency carries risks, including the loss of principal. Speculative trading in bitcoins and other forms of cryptocurrencies, many of which have exhibited extreme price volatility, carries significant risk. Among other risks, interactions with companies claiming to offer cryptocurrency payment platforms or other cryptocurrency-related products and services may expose users to fraud. Blockchain technology is a new and relatively untested technology and may never be implemented to a scale that provides identifiable benefits. Investing in cryptocurrencies and ICOs is highly speculative and an investor can lose the entire amount of their investment. If a cryptocurrency is deemed a security, it may be deemed to violate federal securities laws. There may be a limited or no secondary market for cryptocurrencies. The opinions are intended solely to provide insight into how securities are analyzed.

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