An affiliate of Fairshake—an influential cryptocurrency-aligned political action committee (PAC)—is spending heavily in Michigan ahead of the Aug. 4 Democratic primary for the U.S. House seat in the 13th congressional district. According to filings with the Federal Election Commission (FEC), Protect Progress PAC has reserved roughly $1 million for television and other media aimed at boosting incumbent Democrat Shri Thanedar while attacking his primary challenger, Donavan McKinney.

The campaign effort comes at a critical moment: the primary will decide who moves on to the November general election. The latest spending figures underscore how crypto-aligned political groups are tying financial resources to lawmakers’ voting records and the direction of digital-asset policy in Congress.

Key takeaways

• Protect Progress PAC says it has spent over $986,000 on messaging supporting Shri Thanedar and opposing Donavan McKinney in Michigan’s 13th district primary.
• The expenditures were filed two weeks before Aug. 4, when voters will determine the Democratic nominee for the November general election.
• The Michigan push mirrors Protect Progress’ 2024 spending, when it also backed Thanedar with about $1 million.
• Fairshake affiliates reported a combined $191 million war chest intended to influence key elections, including through multiple PACs.
• Fairshake-aligned spending extends beyond Michigan, with similar activity reported in Arizona and potential spillover into Washington state.

Protect Progress targets the Michigan primary

FEC documentation filed as of Tuesday shows that Protect Progress PAC has spent more than $986,000 on ads. The PAC’s messaging is designed to be pro-incumbent—supporting Democratic congressman Shri Thanedar—and anti-challenger, Donavan McKinney.

The primary is scheduled for Aug. 4. Because the seat’s Democratic nominee will be selected through that vote, the spending suggests the crypto-aligned political operation is focused on shaping outcomes early rather than waiting for the general election.

Why Thanedar and McKinney have become the center of this fight

The spending contrasts with McKinney’s comparatively limited public footprint on digital-assets policy. The article notes that McKinney did not run against Thanedar in 2024 and had not made significant public statements centered on crypto before entering this race. Thanedar, by comparison, has a documented legislative record from his time in Congress.

According to earlier coverage referenced in the report, Thanedar voted in favor of several crypto-related measures during his House tenure, including the CLARITY Act, the GENIUS Act, and the Promoting Innovation in Blockchain Development Act.

At the same time, the challenger’s critique is rooted in campaign finance and campaign spending decisions connected to crypto companies. The report says Thanedar reportedly lost more than $600,000 in the second quarter of 2026 after investing $3.7 million of campaign funds into crypto-related companies.

McKinney also criticized the role of the broader crypto political network in a Tuesday statement tied to the PAC’s spending. In a video posted online, he argued that crypto-aligned groups were “paying” for political leverage and linked that activity to the Trump administration’s record on cryptocurrency and related policy. The statement was presented alongside the PAC spending coverage, reinforcing the narrative that this primary is as much about political access as it is about policy outcomes.

A familiar playbook: repeating the spending pattern from 2024

The Michigan operation is not new. The report notes that Protect Progress spent about $1 million supporting Thanedar in 2024. That year, Thanedar won the Democratic primary with 54.9% of the vote and later captured the general election with 68.6% against Republican and other party challengers.

Re-running a similar level of spending—now in a primary rematch context—suggests Protect Progress and its allies view Thanedar as a key legislative proxy. For investors and political observers, this matters because recurring investment patterns often indicate where crypto-aligned groups expect the policy agenda to move. It also hints at what they may do if a candidate with a less crypto-friendly record attempts to displace an incumbent.

Broader influence strategy: Fairshake affiliates and multiple states

Beyond Michigan, the report describes a larger effort by Fairshake and associated entities. It states that Fairshake and its affiliates reported having $191 million available to influence voters in major elections.

Protect Progress is part of a broader ecosystem of PACs. The report also points to other industry-aligned groups, including:

• Fellowship, described as backed by Cantor Fitzgerald and Anchorage Digital.
• The Blockchain Leadership Fund, described as a hybrid PAC backed by Anchorage and Chainlink Labs.

In Arizona, Protect Progress reportedly spent more than $100,000 on media supporting Representative Greg Stanton’s reelection bid. The report says Stanton voted in favor of CLARITY and GENIUS while in the House and that he won his primary on Tuesday in Arizona’s 4th congressional district with 65% of the vote.

In Washington, the report adds another layer: it says party primaries scheduled for Aug. 4 could be influenced by a Fairshake affiliate. According to the cited FEC filings, the Defend American Jobs PAC spent more than $65,000 on media supporting Amanda McKinney, a Republican running for Washington’s 4th district. The report also references a public statement from the candidate supporting crypto and notes that Representative Dan Newhouse announced in 2025 that he would not seek reelection.

Taken together, the geographic spread suggests a strategy aimed at maintaining momentum across multiple congressional districts—especially where lawmakers have been active on crypto legislation or where challengers are willing to campaign on a pro-crypto agenda.

As Aug. 4 approaches, readers should watch whether similar spending schedules translate into durable primary results, and how the messaging ties specific legislators’ votes and campaign financing decisions to digital-asset policy. The next signals will likely come from additional FEC disclosures and the outcomes of primaries in other states where crypto-aligned PACs have already placed media buys.

South Korea’s major crypto exchanges have seen their trading activity fall sharply over the past year as the country’s stock market surged, suggesting retail speculative interest may be shifting toward equities, Cointelegraph analysis shows.

The Korea Composite Stock Price Index (KOSPI) benchmark more than doubled over the period, while volumes across the country’s largest won-based crypto platforms contracted.

Cointelegraph reviewed CoinGecko’s historical 24-hour volume readings for Upbit, Bithumb, Coinone, Korbit and Gopax, comparing seven-day periods in July 2025 and July 2026.

After calculating the average daily volume and year-over-year percentage change, Cointelegraph took the simple, unweighted average of the five declines, producing an average drop of about 77%. This gives each exchange equal weight regardless of trading volume. However, on a combined basis, average daily volume fell about 89%, to $305 million from $2.82 billion in the comparable July 2025 period. 

ZDNet Korea separately reported that daily volume across the five exchanges was down 88% year-on-year on Monday. It said weaker fee income had pushed some platforms to sell crypto holdings, including Korbit, which raised about 1.6 billion won (about $1 million) by selling 15 Bitcoin (BTC) and 60 Ether (ETH).

South Korea is one of crypto’s most active retail markets, with exchanges relying heavily on trading fees. A sustained preference for equities could weaken crypto liquidity and squeeze smaller platforms, reshaping how local investors allocate capital between speculative assets. 

Korea Composite Stock Price Index’s one-year chart. Source: Yahoo Finance

South Korea’s KOSPI rose 114.44% over the 12 months to July 22, according to Yahoo Finance data, even after retreating from its peak in June. The rally contrasts with shrinking activity on won-based crypto exchanges, suggesting retail investor attention is shifting toward equities. 

Retail fatigue gives institutions room to step in 

A Tiger Research report published on CoinGecko and updated on April 17 said that South Korea’s falling crypto activity reflects more than weaker prices. The report said recycled narratives and projects that failed to deliver contributed to investor fatigue, while the KOSPI rally gave retail traders more places to pursue returns. 

Tiger Research said the widening gap between equity turnover and crypto volume did not necessarily mean that Koreans had lost interest in crypto, but rather that investors had more alternatives. 

Related: South Korea eyes September launch for second phase of CBDC pilot: Report

The report described the market as in structural transition with retail investors stepping back while institutions move in. Banks and financial groups were positioning around won-denominated stablecoins, tokenized real-world assets (RWAs) and exchange investments even before legislation was finalized. 

Tiger said institutional activity could be a healthy replacement for some of the retreating retail participation, although institutions were still finding their footing. 

Magazine: Inside the ‘fake police raid’ that forced a $1M Bitcoin transfer

The merged CLARITY Act runs on one invented term: the ancillary asset, a token sold with a securities offering that is not itself a security. Here is where the concept came from, exactly how it works, why a16z tried to kill it, and what it means for every token you hold.

Every regulatory regime ends up resting on one definition, and the definition is usually invented for the purpose. Securities law rests on the investment contract, four words from a 1946 orange-grove case that have governed a century of capital formation. Banking law rests on the deposit. The framework Congress is currently trying to pass for crypto rests on a term almost nobody outside a Senate office had used before 2022: the ancillary asset. It appears throughout the merged CLARITY Act draft now awaiting a floor vote, it decides which tokens escape the SEC and when, and its grandfather clause quietly settles the legal status of XRP, Solana, and Dogecoin by reference to their own ETFs. It is also, remarkably for a bill’s load-bearing concept, a term the industry’s most powerful venture firm formally asked the Senate to delete. Understanding the ancillary asset is understanding what American crypto law is about to become, and this guide builds the concept from the ground up: the paradox it solves, the mechanics it runs on, the fight over whether it should exist, and what it means practically for tokens and their holders.

The paradox the term was invented to solve

Start with the problem, because the ancillary asset is unintelligible without it.

American securities law asks one question of any fundraising arrangement: is it an investment contract, meaning an investment of money in a common enterprise with an expectation of profits from the efforts of others, the Howey test. Token sales usually are. A team raises money by selling tokens, buyers expect the team’s work to make the tokens valuable, and every element of Howey is satisfied; courts have said so repeatedly. The trouble begins one step later. The token itself, once issued, circulating on exchanges among strangers, is just an entry on a ledger. It carries no claim against the team, pays nothing, promises nothing. Is that object a security forever, because it was born in a securities transaction?

For a decade, American law had no stable answer, and the instability was the industry’s defining legal condition. The SEC’s enforcement-era position treated the token as inseparable from its offering, effectively a security in perpetuity; the industry argued tokens mature into commodities as networks decentralize; courts split, most famously in the Ripple litigation, where the same token was found to be sold as a security to institutions and as not-a-security on exchanges. The result was a classification that depended on the transaction, the buyer, and the judge, which is no classification at all.

The ancillary asset is the legislative answer, and its logic is surgical: separate the transaction from the thing. The fundraising arrangement, the investment contract, remains a security and gets securities treatment. The asset delivered through it, if it grants the buyer none of a security’s actual rights, is designated something else, ancillary to the securities transaction instead of the subject of it, with its own disclosure regime and its own path out of SEC jurisdiction entirely. One sale, two legal objects. The paradox does not get resolved so much as legislated into architecture.

The definition, clause by clause

The term’s formal definition has evolved across drafts, but its working structure has held stable since its first appearance, and each clause does specific work.

An ancillary asset is, first, an intangible, commercially fungible asset. Fungibility excludes NFTs and one-off instruments; intangibility excludes tokenized claims on physical things. It is, second, offered, sold, or otherwise distributed in connection with the purchase and sale of a security through an arrangement constituting an investment contract. This is the birth criterion: the category only exists downstream of a securities transaction, which is why the term is ancillary, the asset rides alongside the security rather than being one. Third, and decisively, the definition excludes any asset that provides the holder debt or equity interests, liquidation rights, interest or dividend payments, or other financial claims against the issuer. This is the functional test, and it is the clause that does the sorting: a token that pays you, or gives you a claim on a company’s assets or profits, is not ancillary, it is simply a security wearing a costume. A network token, useful for gas, staking, or access, conveying no claim against anyone, can qualify.

Around the definition, the framework builds three mechanisms. The first is disclosure: while an ancillary asset’s value depends on the entrepreneurial or managerial efforts of an originator, that originator owes periodic, tailored disclosures, a lighter, crypto-specific regime covering the network, the token’s economics, and insider holdings, with the SEC directed to issue guidance for shared-responsibility cases. The obligation is tied to dependence, not to time: it ends when the network matures past reliance on the originator, which connects the category to the bill’s maturity and self-certification machinery. The second is the capital-raising exemption: offerings of ancillary assets under a size cap, $75 million in the current architecture, can proceed on an offering statement covering the blockchain, source code, consensus mechanism, and insider positions, rather than full securities registration, which is the provision that would actually reopen compliant token fundraising in the United States. The third is the escape hatch that made January’s headlines: the merged draft deems a token non-ancillary, and not a security at all, if units of it were the principal asset of an exchange-traded product listed on a national securities exchange on January 1, 2026. Read against the ETF calendar, that clause statutorily classifies XRP, SOL, DOGE, and the rest of the late-2025 ETF class, no Howey analysis required. The SEC’s own product approvals became the legislature’s taxonomy.

One more mechanism deserves its place in the map before the criticism, because it shows the category working as a system, not just a definition: the interaction between ancillary status and trading venues. Under the framework’s architecture, an ancillary asset is not merely exempt from securities registration; it is affirmatively tradable on CFTC-registered digital commodity exchanges once the venue completes its own certification that the asset meets the statutory requirements, the listing-side counterpart to the issuer-side process. That two-key design, the asset’s status plus the venue’s certification, is what converts an abstract classification into an operating market: an exchange can read the definition, document its analysis, list the asset, and carry regulatory responsibility for the judgment, which is precisely the risk allocation exchanges have operated under in derivatives for decades and have never had for spot crypto. It also explains a quiet commercial consequence the classification debates skip: under the framework, listing decisions, which today are exercises in enforcement-risk management conducted by legal departments reading tea leaves, become documented compliance judgments with statutory criteria, faster, cheaper, and portable across venues. The years when an American exchange’s listing of a mid-cap token was itself legal news would end, not because scrutiny disappears, but because the scrutiny acquires a text.

The case against the category

The ancillary asset’s most important critic is not a consumer advocate. It is Andreessen Horowitz, the venture firm with more capital deployed in crypto than almost any institution on earth, and its formal letter to the Senate Banking Committee is the sharpest statement of the case that the bill’s foundation is a mistake.

The firm’s argument runs in three steps. First, incoherence: the category defines a class of assets that are simultaneously not-quite-securities while arising from arrangements that satisfy Howey, a middle object that, a16z warned, invites legal conflict instead of settling it, because litigants and future commissions can argue endlessly about which side of the hybrid governs. Second, the loophole risk: a definitional category keyed to what rights a token formally grants can be gamed by structuring, a token engineered to avoid the enumerated rights while economically replicating them, weakening investor protections precisely where they matter. Third, the alternative: rather than inventing a new object, the firm urged a control-based decentralization framework, classification turning on whether any party retains unilateral authority, operational, economic, or governance, over the system, applied through the existing Howey lens, which, in the letter’s words, “should not be abandoned.”

The counterargument, which carried the drafting, is practical. Control-based tests are exactly what a decade of case-by-case chaos looked like: fact-intensive, litigated asset by asset, resolvable only in hindsight. A definitional category, whatever its edge cases, is administrable, an issuer can read the rights its token grants and know its classification, and the disclosure-while-dependent regime addresses the investor-protection gap directly, not through classification fights. The two positions are less opposed than they appear, since the bill’s maturity machinery imports decentralization analysis anyway; the dispute is about which concept sits at the foundation and which serves as the test. But holders should register the meta-fact: the load-bearing term of the American crypto framework is one the industry’s own leading investor argued should not exist, which is a useful calibration for how settled this architecture actually is.

The Ripple shadow over the definition

The ancillary asset was not drafted in a vacuum, and its clearest intellectual ancestor is worth naming, because the category is, in large part, the Ripple ruling converted into statute, with the ruling’s problems inherited alongside its insight.

Judge Analisa Torres’s 2023 decision in the SEC’s case against Ripple reached a conclusion that scandalized securities traditionalists and delighted the industry: the same token, XRP, was sold as a security in Ripple’s institutional sales, where buyers invested with expectations pinned to the company’s efforts, and was not a security in programmatic exchange sales, where anonymous buyers on order books had no idea whose efforts they were relying on. The transaction, not the token, carried the classification. Critics called the result incoherent, an asset flickering between legal categories depending on the checkout counter, and a different judge in a parallel case rejected the reasoning outright, which left the doctrine split exactly where doctrine is most expensive to split: at the foundation.

Read the ancillary asset against that history and its purpose sharpens. The category takes the Torres insight, securities law attaches to investment arrangements, not to the objects passing through them, and stabilizes it: instead of a token being a security in some sales and not others, the framework declares the fundraising arrangement a security always, the qualifying token a security never, and bridges the investor-protection gap with the originator disclosure regime that operates while dependence lasts. The flickering stops. What the buyer on the exchange gets is not a judicial finding about their particular transaction but a statutory status attached to the asset class itself, knowable in advance, which is the entire practical difference between a legal system and a litigation lottery.

But the inheritance runs both ways, and honesty requires the second half. The Torres framework’s unresolved question, what protects the exchange buyer who is economically just as dependent on the founding team as the institutional buyer, is also the ancillary asset’s unresolved question, and it is precisely the gap a16z’s letter aimed at. The framework’s answer, disclosure-while-dependent plus the maturity endpoint, is a real answer, and whether it is a sufficient one will not be known until the first cycle of ancillary offerings produces its first failures, its first disclosure fights, and its first buyers arguing that the tailored regime told them less than a registration statement would have. The category resolves the classification war on the industry’s preferred terms. The investor-protection war it merely reschedules, with better-defined battle lines, which, in fairness, is more than any court managed in a decade.

What it means in practice

For anyone holding or building with tokens, the category’s consequences sort into three practical layers.

For the grandfathered class, the effect is immediate and total. Tokens that anchored listed ETPs on the January 2026 snapshot date exit the analysis entirely, non-ancillary, non-securities, CFTC-side by statute, which converts the ETF approvals of late 2025 into permanent legal settlements and explains why institutional research now treats the bill’s passage as those assets’ true classification event.

For newer and future tokens, the category defines the compliant lifecycle: launch through an exempt ancillary-asset offering with its tailored offering statement, disclose while the network depends on the founding team, certify maturity when it no longer does, and graduate to digital-commodity status. That path’s existence is the bill’s actual product, the first legal route from token launch to commodity status ever written into American law, and its costs, disclosure obligations from day one, decentralization decisions made early and documented, are the price. Teams that structured tokens to dodge securities law will instead structure them to fit the ancillary definition, which is the same activity pointed at a clearer target.

And for the disputes that will inevitably continue, the category relocates them. The old fight, is this token a security, becomes three narrower ones: does this token grant a disqualifying right, has this network matured past its originator, and does this certification survive challenge. Those are the battlegrounds the definition creates, they are where the next decade’s crypto securities litigation will live if the bill passes, and knowing the term means being able to read them. The word is new, invented, and contested. It is also, pending sixty votes, about to be the most important noun in the asset class.

A closing note on the vocabulary wars, because readers will encounter the category under competing names and should not be confused by them. The merged framework actually deploys a small family of terms: the digital commodity, the mature network’s asset under CFTC oversight; the investment contract asset, the token still attached to its securities transaction; the ancillary asset, the bridge state between them; and the non-ancillary asset, the grandfather clause’s creation, a token that skips the bridge entirely because its ETP listing settled its status by snapshot. Different drafts have shuffled which term carries which weight, the House text leaned on digital commodity where the Senate architecture leans on ancillary asset, and coverage that mixes the two bills’ vocabularies produces most of the public confusion about what the framework does. The practical decoder: ask of any token where it sits in the lifecycle. Born in a fundraising arrangement and still team-dependent: investment contract plus ancillary asset, disclosure owed. Matured past dependence, certified: digital commodity, CFTC-side. ETP-listed on the snapshot date: non-ancillary, classification settled by statute. Never sold through an investment contract at all, the Bitcoin case: never in the securities analysis to begin with, a digital commodity by nature, not by graduation. Four positions, one map, and every asset in the market lands on exactly one of them, which, whatever else is said about the framework, is one more position than the old regime could assign with confidence to anything.

Disclaimer: This article is for information and educational purposes only and does not constitute financial, investment, or legal advice. It describes draft legislation whose definitions and provisions can change before enactment, and no classification discussed here is final until a law passes and takes effect. Always do your own research. Information is accurate as of July 21, 2026. 

Frequently Asked Questions

Galaxy Digital has launched a new push to accelerate post-quantum security work for Bitcoin, pledging up to $5 million in grants for open-source developers. The initiative is designed to support research and engineering across quantum-resistant upgrades, including cryptography research, migration tooling, and formal security reviews.

Alongside the funding, the company announced the formation of a quantum advisory council as part of its Bitcoin Quantum Readiness Initiative. Galaxy said Tuesday that the council will bring together researchers with backgrounds spanning cryptography, applied security, and academic computing—an attempt to turn abstract “quantum risk” discussions into concrete development roadmaps.

Key takeaways

• Galaxy Digital is offering up to $5 million in open-source grants aimed at post-quantum cryptography work for Bitcoin-related systems.
• The grant scope covers more than algorithms, including Bitcoin signature schemes, wallet/custodian migration tools, and security audits.
• A new quantum advisory council under the Bitcoin Quantum Readiness Initiative includes researchers from the University of Calgary, MIT, and Boston University.
• Market debate over timelines remains unsettled, with some executives arguing there’s decades before a meaningful threat while other research emphasizes preparation windows.
• Existing standards momentum matters because NIST has already published post-quantum encryption standards that could inform future Bitcoin migrations.

What Galaxy Digital is funding

Galaxy’s announcement ties its grant program to practical components of a potential Bitcoin post-quantum transition. According to the company’s statement, the funding will support “quantum-resistant upgrade proposals” and post-quantum cryptography research, with additional emphasis on Bitcoin signature schemes.

The proposal also explicitly targets the implementation layer that many teams often treat as an afterthought: wallet and custodian migration tooling. That matters because even when a cryptographic replacement is theoretically possible, moving users, keys, and custody infrastructure to new standards typically requires careful engineering, operational planning, and risk-managed rollouts.

Galaxy also said the grants include support for formal security audits—an area that can be decisive for institutional adoption, especially when new cryptographic constructions may be unfamiliar to auditors or deployed systems.

Who is on Galaxy’s quantum advisory council

Galaxy Digital’s Quantum Readiness Initiative adds an advisory layer through a council that includes Barry Sanders, professor and scientific director of Quantum City at the University of Calgary; Damien Bérubé, an MIT Sea Grant Knauss fellow; and Eran Tromer, professor of computer science at Boston University.

While advisory councils don’t directly change Bitcoin protocol code, they can influence which research paths are prioritized, how proposals are evaluated, and what “readiness” criteria developers should meet. For builders, that can reduce uncertainty by clarifying the kinds of cryptographic schemes and migration methods most likely to survive scrutiny.

Galaxy’s earlier announcement of the Bitcoin Quantum Readiness Initiative provides the broader context for this step: the new grants and council are positioned as ways to convert readiness planning into deliverables that can be used by open-source contributors.

https://www.galaxy.com/newsroom/galaxy-launches-bitcoin-quantum-readiness-initiative

How much Bitcoin could be exposed?

Concerns about quantum risk have sharpened around how future quantum computers could affect cryptographic systems currently used to secure Bitcoin. Analytics provider Glassnode has argued that a sizable portion of Bitcoin’s supply could be exposed if “cryptographically relevant” quantum computers emerge.

As reported by Glassnode via a Cointelegraph-linked analysis, around 30% of Bitcoin’s supply could be at risk. Glassnode’s breakdown further distinguishes between coins it considers “structurally unsafe” (about 10% of supply due to output type) and “operationally unsafe” (about 20% of supply tied to key or address management practices).

That split matters for investors and developers because it suggests two different problem categories. “Structural” concerns relate to the cryptographic assumptions embedded at the protocol or script level, while “operational” concerns point to practices that exchanges, custodians, and wallet operators can potentially adjust faster than they can rewrite protocol fundamentals.

The timeline fight: “decades” vs “years”

Perhaps the biggest unresolved question behind any post-quantum plan is timing. The community’s debate remains active, with different researchers and executives placing drastically different weights on when quantum capabilities could become dangerous to today’s signature schemes and related cryptographic assumptions.

Blockstream CEO Adam Back argued in November 2025 that Bitcoin faces no “meaningful quantum threat” for at least the next 20 to 40 years. He framed this as sufficient runway for adoption of post-quantum cryptography standards approved by the US National Institute of Standards and Technology (NIST).

At the same time, other research emphasizes a shorter preparation horizon. NIST released its first set of finalized post-quantum encryption standards for key establishment and digital signatures in August 2024, including algorithms that could support future migrations across industries and potentially Bitcoin-related upgrades.

NIST’s standardization is important to the debate because it reduces the “unknown unknowns” around what algorithms might be considered credible at the cryptographic policy level.

Beyond general standards, practical migration proposals are already circulating. In December 2025, Blockstream Research published a paper proposing a hash-based signature scheme as a “promising path for securing Bitcoin in a post-quantum world.” The proposal, as described in coverage, targets replacing Bitcoin’s ECDSA and Schnorr signatures with a scheme designed so that security relies solely on cryptographic hash functions.

And while Back’s long timeline suggests extensive lead time, Bernstein has argued for a shorter window: in an April report referenced in coverage, Bernstein suggested Bitcoin “has about three to five years to prepare” for a post-quantum security upgrade.

Why this matters now even if the threat is distant

Even if quantum breakthroughs are decades away—as some industry leaders expect—the hard part is rarely the cryptography alone. It’s the migration: coordinating changes across wallets, custodians, infrastructure providers, developer ecosystems, and the security processes that institutions use to deploy and maintain cryptographic systems.

Galaxy’s grant design reflects that reality. By funding not only quantum-resistant proposals but also wallet and custodian migration tooling and formal audits, the program acknowledges that “readiness” is an engineering and operational challenge, not just a theoretical one.

For Bitcoin holders, the near-term takeaway is less about expecting immediate protocol changes and more about watching whether the community converges on migration paths that can be implemented safely and iteratively—without forcing rushed transitions if timelines shift.

Readers should watch how Galaxy’s grants translate into concrete open-source deliverables—especially any proposals that connect signature-layer changes to realistic wallet and custody migration plans—and whether ongoing research narrows the gap between long-range quantum timelines and shorter “prepare now” arguments.

S&P Dow Jones Indices and Pantera Capital have launched a new rules-based digital asset index designed to evaluate blockchain networks and protocols using protocol revenue rather than token prices or pure market capitalization. The move signals a continued shift toward “productive activity” metrics as institutional players look for benchmarks that better reflect real-world usage.

In an announcement on July 21, the firms said the index is intended for institutional allocation and could be used as the basis for investment products or as a reference portfolio for actively managed strategies. The methodology also aims to help investors distinguish established on-chain business activity from more speculative exposure.

Key takeaways

• Protocol revenue is central: networks are selected and ranked based on aggregate protocol revenue over the prior two quarters.
• Liquidity and size gates apply: eligibility requires minimum thresholds for protocol revenue, market capitalization, and liquidity.
• Concentration is controlled: the largest holding is capped at 35%, while most other constituents are capped at 20%.
• Quarterly rebalancing: the index is recalculated and rebalanced on a quarterly schedule.
• Bitcoin and XRP are not included at launch: per S&P’s methodology discussion, BTC and XRP are the largest non-constituents versus the S&P Cryptocurrency Broad Digital Asset Index.

A revenue-based benchmark for “productive” blockchain activity

Traditional crypto benchmarks often track assets using market capitalization or token price movements. By contrast, S&P and Pantera’s index focuses on protocol revenue to measure how much economic value is being generated by the networks and the applications built on them. The firms draw from the S&P Cryptocurrency Broad Digital Asset Index, but filter the eligible universe using minimum thresholds for protocol revenue, market capitalization, and liquidity.

After networks pass the eligibility requirements, they are ranked by aggregate protocol revenue across the previous two quarters. Weighting then uses adjusted market capitalization, subject to portfolio construction rules. According to S&P, the framework is designed to emphasize established blockchain activity and reduce reliance on exposure that may be driven mainly by speculation.

This distinction matters for investors because protocol revenue is intended to function as a proxy for sustained usage and monetization, whereas market cap and token price can reflect expectations and sentiment even when on-chain monetization is weaker. The index’s quarterly rebalancing also means the benchmark can respond to changes in protocol performance over time, rather than remaining tied to a static basket.

Initial constituents and what’s different versus a broad benchmark

The index launched with 18 constituents. In S&P Dow Jones Indices’ Indexology blog post, the five largest holdings at launch were Ether (ETH), BNB (BNB), Solana (SOL), TRON (TRX), and Hyperliquid (HYPE).

The blog post also highlights a key selection contrast: Bitcoin (BTC) and XRP (XRP) were identified as the largest non-constituents compared with the S&P Cryptocurrency Broad Digital Asset Index. That outcome is consistent with a methodology that prioritizes protocol revenue-based eligibility and ranking. In other words, assets can be large by market cap yet still fail to become constituents if they do not meet the index’s revenue criteria as defined under the benchmark rules.

For allocators, this is one of the index’s most practically important implications. A revenue-driven selection mechanism changes not only what investors own, but also what risks the benchmark is implicitly targeting—shifting away from pure token beta toward networks whose protocol economics are feeding the index construction process.

Why institutions are pushing beyond market-cap indexes

The launch comes as the broader industry continues to develop institutional-grade crypto benchmarks. These efforts are unfolding alongside traditional finance firms expanding crypto capabilities and the growing adoption of tokenized assets, which increases demand for standardized measurement frameworks.

In the US, ETF and index activity has accelerated. Hashdex launched the Nasdaq Crypto Index US ETF on Feb. 14, 2025, which was described as the first multi-asset spot crypto exchange-traded fund in the United States. Franklin Templeton followed six days later with the Franklin Crypto Index ETF, tracking Bitcoin and Ether through the US CF Institutional Digital Asset Index, which is market capitalization-weighted.

Other benchmark approaches have also emerged. In April, MarketVector Indexes and Coinbase Asset Management launched the Coinbase Store of Value Index, which combines Bitcoin with tokenized gold using an inverse-volatility weighting model—an example of how benchmark design can shift exposure toward different portfolio goals.

Market participants have argued that as crypto ecosystems evolve, diversification across networks and strategies may become more operationally attractive. Earlier coverage referenced Bitwise chief investment officer Matt Hougan stating that crypto index funds are expected to be a major theme in 2026 as investor needs grow and the market becomes more complex. The core rationale, as described, is that it is increasingly difficult to predict which blockchain networks will prove durable winners, making diversified index solutions a pragmatic way to obtain broad exposure.

S&P’s latest step in digital asset benchmark expansion

Beyond this new product, S&P Dow Jones Indices has been broadening its digital asset benchmark footprint. Last October, S&P introduced the S&P Digital Markets 50 Index, which combines 15 cryptocurrencies with 35 publicly traded companies tied to the crypto ecosystem. That earlier index illustrates how S&P is experimenting with different ways to connect crypto exposure to both on-chain activity and publicly traded crypto-adjacent equities.

With the new protocol-revenue index, the emphasis is narrower and more specific: measure blockchain networks through the economics of their protocols. Investors watching for benchmark evolution should pay attention to whether revenue-based methodologies gain traction in index-tracked products, and how issuers translate those rules into investable strategies—particularly in terms of transparency around revenue estimation and how methodology changes affect index constituents over time.

Next, investors and portfolio managers will likely focus on how the benchmark performs as protocols’ monetization trends shift quarter to quarter, and whether the revenue-based framework attracts liquidity and product sponsorship comparable to traditional market-cap indexes.