S&P’s Digital Markets 50 ushers in crypto’s index age

The day crypto got a benchmark people can model around

On October 7, 2025, S&P Dow Jones Indices introduced the S&P Digital Markets 50, a hybrid benchmark that mixes 15 major crypto assets with 35 publicly traded companies tied to the digital asset economy. The debut matters less for its ticker count and more for what it unlocks: standardization, passive flows, and product design that advisors and institutions understand. It is the difference between a shelf of unlabeled jars and a supermarket aisle. S&P has also said that Dinari collaborated on the index design and plans to issue a token that tracks the benchmark, signaling an on-chain route to make the hybrid index directly investable. S&P Digital Markets 50 announcement set the stage.

That makes this launch more than another crypto index. It is a blueprint for how the market could finally align the mechanics of traditional passive investing with the programmability of blockchains.

What is inside the S&P Digital Markets 50

The structure is simple on paper and novel in practice: 50 components in two sleeves.

Crypto sleeve: 15 large, liquid tokens screened by market size and trading quality.
Equity sleeve: 35 United States listed companies whose businesses are materially linked to crypto, blockchain, or the picks and shovels that power them, from exchanges and miners to semiconductors and payments.

A hybrid design like this solves a problem that has nagged allocators. A crypto-only index captures the beta of tokens but misses how infrastructure firms and listed operators express the cycle in earnings and cash flows. An equity-only basket misses the protocol level where most new economic activity lives. Together, you get a fuller picture and a benchmark broad enough to build products around.

Two details worth watching as S&P publishes ongoing materials:

Weight caps help avoid an index that simply mirrors bitcoin and ether. Caps enforce diversification but also create tracking challenges when a handful of names dominate. We discuss those tradeoffs below.
Eligibility screens aim to filter thinly traded or hard to price assets. That improves investability for funds and structured products, but it may exclude newer networks that later become important.

Why benchmarks change behavior and pull in passive flows

Indexes are not just scoreboards. They are ordering devices that move money. The moment a benchmark exists, asset allocators and product issuers have a common reference for exposure, risk, and tracking.

Consider how passive flows propagate in three steps:

Definition: An index defines what counts as the investable universe and how much each thing should weigh. That turns a messy market into a ruleset.
Packaging: Product sponsors spin up exchange traded funds, separately managed accounts, and model portfolio sleeves that commit to follow the ruleset.
Distribution: Advisors, platforms, and retirement plan menus slot those products into models, and systematic flows begin to rebalance toward the benchmark.

Crypto has had a partial version of this for years through single asset funds and a handful of diversified products, but they have not served as a universal reference. The S&P label and methodology discipline changes that. If a large registered investment advisor wants a 3 to 7 percent digital markets sleeve, it is far easier to justify a well defined S&P benchmark than a bespoke basket or a theme fund with opaque rules.

The flywheel looks like this in practice:

Index launched, methodology public.
Prospectuses reference it as the target exposure.
Platforms add it to their product shelves.
Model portfolios adopt a small allocation.
Quarterly rebalances push cash toward inclusions and away from deletions.

This is how the S&P 500 and sector indices shaped equity flows for decades. Crypto is now getting its version.

The on-chain twist: Dinari’s tokenization plan

The most interesting part of this story is not an exchange traded fund. It is the prospect of a fully backed on-chain instrument that mirrors the index and can plug into decentralized finance.

Dinari has stated that it will issue a token that tracks the S&P Digital Markets 50, with each equity position backed one to one by custodied shares and an analogous system for the crypto sleeve. In plain terms, the token is intended to be a wrapper around the same exposures the index defines, designed to live on-chain and to be redeemable at fair value under stated conditions. That creates three new distribution rails at once:

Traditional rails: custody accounts and broker dealers can hold the underlying equities and crypto and deliver the economics to clients.
Fintech rails: neobanks and adviser tech platforms can expose the tokenized wrapper to users outside of brokerage accounts, subject to eligibility and local rules.
On-chain rails: wallets and smart contracts can hold the token directly and interact with it programmatically. For programmability examples, see how Uniswap v4 hooks are live and turning swaps into composable building blocks.

If Dinari executes as described by S&P, the wrapper functions like an index fund that can move at internet speed and interoperate with DeFi. It becomes collateral you can post into a lending market, a unit you can swap in a liquidity pool, and a building block for structured payoffs.

Advisors and model portfolios now have something to plug in

For a registered investment advisor in the United States, the leap from zero to crypto is less about personal conviction and more about process. Compliance teams want a benchmark, a policy statement, and products with clear disclosure. The S&P Digital Markets 50 provides the benchmark. The rest is plumbing.

Here is a concrete template:

Policy: Add a digital markets sleeve to a model portfolio, scoped to 3 to 7 percent of assets for growth oriented models and 1 to 3 percent for balanced models. Document the rationale as diversified exposure to the crypto ecosystem across tokens and equities, benchmarked to the S&P Digital Markets 50.
Implementation path A: Use a fund or separately managed account that tracks the index. Rebalance quarterly in line with index changes.
Implementation path B: Use the on-chain token wrapper for non qualified accounts on platforms that permit it, subject to know your customer and custody policies. Employ a registered qualified custodian and restrict transferability if needed.
Risk controls: Set a position limit per client and a drawdown review trigger. Require daily liquidity and independent valuation.

If the benchmark becomes a category in research tools, the adoption hurdle falls further. Analysts can run peer group comparisons and show tracking error to the index. A shared language replaces ad hoc pitches.

A tailwind from regulation that shortens approval clocks

The timing is favorable. In mid September 2025, the Securities and Exchange Commission approved generic listing standards for commodity based exchange traded products on major United States exchanges. That decision lets exchanges list certain spot commodity and digital asset funds that meet pre set criteria without a bespoke rule filing each time, cutting approval cycles and paperwork. For multi asset crypto funds, that matters. It turns a 6 to 8 month process into something closer to a quarter, which syncs better with index rebalancing and issuer roadmaps. See the Commission’s explanation in its SEC generic listing standards press release.

Shorter clocks do not guarantee yes answers, and products still have to meet the specific quantitative and disclosure requirements. But the path is clearer than it has been at any time in the past decade.

How passive flows might show up on-chain

If an on-chain index token exists and is redeemable, DeFi protocols can treat it as high quality collateral. That unlocks several use cases:

Overcollateralized lending: Protocols can accept the token and assign conservative loan to value ratios based on historical volatility of the index, not a single token.
Liquidity provision: Automated market makers can create pools that pair the index token with stablecoins or major assets, allowing traders to express a view on the basket versus cash in one step.
Structured payoffs: Developers can write vaults that sell covered calls on the index token or create principal protected notes by combining it with treasuries held in tokenized form.

The key benefit is that the collateral is diversified. A forced liquidation would hit a basket, not a single asset, which could reduce tail risk for protocols during market stress. Pricing is also easier if there is an official net asset value and public index values to anchor oracles.

The risks and the fine print

Every design choice in a benchmark introduces a tradeoff. Here are the ones that matter most for allocators and builders.

Methodology caps can save or stunt the index

Benefit: Caps reduce overconcentration and keep the index from simply becoming a proxy for one or two mega assets. They also improve the odds that a passive product can hold all constituents without breaching issuer concentration limits in investment policies.
Cost: Caps create structural underweights to the largest, most liquid assets. In a strong uptrend led by those names, capped indexes can lag materially. Caps also force more turnover at each rebalance as high flyers are cut back, which means higher trading costs and taxable events in some wrappers.

Action: If you are an asset manager building a fund or token around this index, publish expected tracking error bands and the cost of rebalances in different market regimes. Advisors need to know what that means for client returns and distributions.

Liquidity and pricing across two very different markets

Issue: The equity sleeve trades on stock exchanges during set hours. The crypto sleeve trades 24 by 7 on global venues. Spreads, depth, and outages vary by venue. That complicates calculation of fair value, especially around market open and close when one sleeve is shut and the other is moving. Traditional markets are adapting, as seen with CME's 24/7 crypto access.
Implication: Net asset value calculations and creation redemption windows need clear rules. So do oracles for on-chain uses, including which venues and prices are included, how to handle outliers, and what to do if a major venue goes down.

Action: Protocols considering the token as collateral should require dual price feeds tied to the official index print and to a conservative time weighted market price with circuit breakers.

Governance and index maintenance

Issue: Categories like crypto evolve faster than traditional sectors. Methodology committees will face edge cases quickly: staking rewards, protocol upgrades, token migrations, and corporate actions for miners or exchanges. How those are handled can change weights and inclusions.
Implication: Surprises around constituents can trigger flows and price moves. Transparency around committee decisions and clear calendars for reviews will matter more here than in slower moving sectors.

Action: Asset managers and DeFi protocols should subscribe to index notices and build change management into their risk engines. Do not hard code assumptions about constituents or weights.

Regulatory availability and shutdown risk

Issue: Even with generic listing standards, specific products need to clear registration, custody, and disclosure hurdles. Government funding disruptions can also delay effectiveness dates and staff reviews.
Implication: Launch timelines for funds and on-chain wrappers may slip, especially across jurisdictions. Tokens that represent United States equities may not be available to some investors, and transfer restrictions are common.

Action: Communicate eligibility up front. If a token will not be available in the United States at launch, say so and provide a waitlist. For exchange traded products, provide a realistic timeline with contingencies for holidays and blackout periods at regulators and exchanges.

Collateral safety and smart contract risk

Issue: A tokenized index wrapper adds new attack surfaces. You have the custodian trust model for equities, the crypto custody model for tokens, the smart contract that represents the basket, and the oracle that prices it.
Implication: A failure in any layer can break redemption, misprice collateral, or force emergency actions that harm holders.

Action: Publish an audit trail. That includes independent smart contract audits, real time proof of collateral for equities and crypto, clear redemption rules with maximum settlement times, and named counterparties for custody. Establish an incident response plan with predefined pause conditions and governance limits.

Liquidity crowding and unintended flows

Issue: When a new benchmark becomes popular, money tends to crowd into index inclusions. That can help with depth but can also inflate valuations or tighten borrow supply for constituents.
Implication: If the index token becomes popular collateral, correlated liquidations during market stress could amplify volatility even if the basket is diversified.

Action: Limit leverage against the token in the first 6 to 12 months while markets learn its behavior. Encourage multiple market makers and creation redemption agents to reduce single point bottlenecks.

What this could mean over the next 12 months

First wave products: Expect index tracking funds and certificates to file, with exchange traded products potentially emerging faster than before due to the new listing standards. The on-chain wrapper could arrive in phases by jurisdiction and platform.
Model portfolio adoption: Advisor platforms may start with small sleeves in growth and opportunistic models. If tracking holds and liquidity builds, some will promote the sleeve to core plus status.
DeFi integrations: A conservative lending market and a blue chip automated market maker pool are likely first integrations. Structured products will follow once oracles and redemption histories are established.
Methodology refinements: As the market evolves, expect clarifications around stablecoin treatment, staking rewards, and corporate actions for miners and exchange operators.

A simple metaphor for what just happened

Think of crypto’s investable universe as a new city with vibrant neighborhoods but no street names. Early tourists hire guides who know a few alleys. A benchmark puts up street signs. A tokenized wrapper paves bike lanes so anyone can ride without a car. The combination is how a city becomes livable for families, not just adventurous travelers.

How to lean in without overreaching

For advisors: Pilot a 2 to 3 percent sleeve in suitable models, benchmark to the S&P Digital Markets 50, and measure tracking and drawdowns through at least one rebalance. Use the cleaner reporting to have better client conversations about what they actually own.
For asset managers: Build daily creation redemption capacity across the two sleeves and disclose your rebalance playbook. If you plan an on-chain share class, design oracle fallbacks and publish a collateral proof schedule.
For DeFi teams: Start with conservative loan to value and independent oracles. Require proof of reserves and rights to redeem. Add a kill switch that pauses new loans against the token if the index deviates from net asset value beyond a set band. For distribution reach, note how Samsung and Coinbase flip crypto to the default setting for tens of millions of users.

The bottom line

Crypto finally has a benchmark that advisors can defend and developers can compose with. The S&P Digital Markets 50 marries protocols with public companies in a single ruleset, and Dinari’s planned tokenization adds the missing bridge into programmable finance. The risks are real, from methodology choices to custody and oracle design, and the timelines will test patience. But if passive flows taught us anything, it is that benchmarks quietly reshape markets by giving capital a map to follow. The map just arrived. The next move belongs to the product builders and the risk managers who will decide how quickly to put it to work.