The crypto asset class is vast and complex, with thousands of unique digital assets serving different purposes. For investors and regulators, navigating this landscape without a clear framework can be challenging. Recognizing this need, 21Shares and CoinGecko have collaborated to create the Global Crypto Classification Standard, a comprehensive report aimed at bringing clarity and structure to the market.
Understanding the Need for a Crypto Classification Standard
Unlike traditional financial assets like stocks or bonds, which can be neatly categorized by sector or industry, cryptoassets vary drastically in their function, technology, and utility. A simple payment token like Bitcoin operates on a completely different premise than a governance token for a decentralized exchange. This diversity, while a sign of a maturing ecosystem, creates a significant barrier to understanding.
The lack of a universal classification system has led to inconsistencies in how assets are discussed, analyzed, and compared. The new standard aims to solve this by providing a uniform, research-driven methodology that allows investors to better understand the nuances, commonalities, and differences between various digital assets.
The Three-Level Classification Methodology
The core of the report introduces a detailed, three-level taxonomy designed to categorize any cryptoasset systematically.
Level 1: The Crypto Stack
This level identifies the foundational layer of the asset. It answers the question: What is this asset's primary function within the blockchain ecosystem? The main categories here include:
- Cryptocurrencies: Digital assets designed primarily to act as a medium of exchange or store of value, like Bitcoin.
- Smart Contract Platforms: Blockchains that enable the creation of self-executing contracts and host decentralized applications, such as Ethereum.
- Decentralized Applications (dApps): Tokens that power specific applications built on top of smart contract platforms.
Level 2: Market Mapping by Sectors and Industries
This level provides a more detailed view of the asset's economic and functional role.
- Sector: This defines the broad market segment the asset operates in, such as Infrastructure, Metaverse, or Decentralized Finance (DeFi).
- Industry: This drills down into the specific niche or vertical within that sector, examples being Developer Tooling, Payment Platforms, or Credit/Lending.
Level 3: Token Taxonomy
The final level defines the asset's specific design and utility. This includes categories like:
- Cryptocurrency
- Staked Currency
- Governance Token
- Wrapped Token
- Stablecoin
- Non-Fungible Token (NFT)
Practical Application: Classifying Bitcoin and Uniswap
To illustrate how the standard works, the report provides clear examples using two well-known assets.
| Crypto Asset | Ticker | Level 1: Crypto Stack | Level 2A: Sector | Level 2B: Industry | Level 3: Token Taxonomy |
|---|---|---|---|---|---|
| Bitcoin | BTC | Cryptocurrencies | Infrastructure | Payments | Cryptocurrency |
| Uniswap | UNI | Decentralized Application (dApp) | Decentralized Finance (DeFi) | Decentralized Exchanges (DEXs) | Governance Token |
This table demonstrates how the framework effectively distinguishes between a foundational cryptocurrency and a token governing a specific DeFi application.
The Impact on the Crypto Ecosystem
The introduction of a standardized classification system is a significant step forward for the entire industry. For investors, it provides a much-needed lens through which to analyze and compare assets, assess risk, and build diversified portfolios based on clear, logical categories rather than hype or speculation.
For regulators, this framework offers a common language and structure to understand the market's composition, which can aid in developing more informed and effective policies. It brings a level of rigor and transparency that is essential for the long-term health and legitimacy of the crypto space.
The partnership plans to apply this methodology to the top 100 cryptoassets by market capitalization, with the classifications becoming publicly available. This initiative promises to bring unprecedented clarity to the market. 👉 Explore more strategies for crypto market analysis
Frequently Asked Questions
What is the purpose of the Global Crypto Classification Standard?
The standard aims to create a uniform model for categorizing cryptoassets. It helps investors and regulators systematically understand the function, sector, and type of different digital assets, making the complex market easier to navigate and analyze.
Who created this classification standard?
The standard was developed through a partnership between 21Shares, a major issuer of cryptocurrency exchange-traded products (ETPs), and CoinGecko, a leading independent cryptocurrency data aggregator. Their combined expertise ensures the framework is both practical and data-driven.
How does the three-level taxonomy work?
It classifies assets on three distinct levels: their place in the overall crypto stack (Level 1), their market sector and industry (Level 2), and their specific token type or utility (Level 3). This multi-layered approach provides a comprehensive view of any asset.
Will this classification be applied to existing cryptocurrencies?
Yes. The partners have announced plans to classify the top 100 cryptocurrencies by market capitalization using this new standard. These classifications will be made available to the public, serving as a valuable resource for the community.
How can investors use this standard?
Investors can use this framework to compare assets objectively, identify trends within specific sectors like DeFi or infrastructure, and build more strategic and diversified portfolios based on clear functional categories.
Does this framework account for new types of cryptoassets?
While the current report covers major asset types, the dynamic nature of crypto means the framework is designed to be adaptable. It provides a solid foundation that can likely be expanded upon as new innovations and asset classes emerge.